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SubscribeExperts see positive outlook for Bitcoin in the current year
The year 2020 was truly magical for the cryptocurrency market, Bitcoin soared in price by more than 300%, while Altcoins showed growth of 1000 and even 10,000 percent. Money flowed like a river, and the hype of cryptocurrency assets went far beyond small unskilled investors.
Institutional investors flooded the market, followed by funds, banks, and large companies eager to grab their piece of the pie. The hype around digital assets has become so great that the world's largest asset manager, BlackRock, has become interested in them. To understand who BlackRock is, you just need to see the figure that reflects the volume of assets under their management, $7 trillion.
This is not just a whale in the world of finance, it is an ocean of money where whales live.
We are talking about BlackRock's interest in working with a new type of asset, which in the medium term will have a positive effect on the industry as a whole.
In the future, digital assets can gain a foothold in the status of a safe-haven asset and become a competitor to gold. This opinion is shared by large hedge funds and banks, for example, recently the chief economist of Bank of Singapore Mansoor Mohi-uddin suggested that cryptocurrencies could very soon begin to compete with fiat money as a medium of exchange, a unit of account.
The idea of Mansoor Mohi-uddin is slightly crazy for the current layman, but it is enough to remember how the cryptocurrency was treated in 2017 and how it is treated now, the differences are cardinal.
The founder and CEO of ARK Investment Management, Cathie Wood, believes that many large companies will continue to invest in Bitcoin to hedge the risks of inflation. According to her, "More and more companies will start using this type of hedging, reflecting it in the balance sheet. Especially technology companies that understand this and are comfortable with cryptocurrencies."
Do not forget that cryptocurrencies are now considered not only as an investment tool, but with the submission of the largest debit electronic payment system PayPal, cryptocurrencies have gone to the people, where anyone can pay with them in 26 million stores, and this is just the beginning.
In my reviews, I have repeatedly disclosed information about how investment funds purchased cryptocurrency when ordinary people predicted the collapse of the crypto market. There were a few more revelations, well-known universities around the world: Harvard, Yale, Brown, and Michigan through their funds, have been buying digital assets over the past year. The information was leaked through the Coinbase report for 2020, which served as intermediaries in the purchase of crypto assets.
Don't you think it is an excellent tactic of big players who, manipulating the public opinion about the negative factors associated with cryptocurrency, bought it at a low price?
Prospects and expectations
First, it is worth running through the information, during the past week, institutional investors invested $1.3 billion in cryptocurrency assets. In turn, the investment firm Union Square Ventures, which manages assets of several billion dollars, is launching a new fund for $250 million. 30% of the funds placed in the fund are planned to be invested in the cryptocurrency industry.
"We will directly buy and store tokens, as well as invest in new projects working in the blockchain field. Blockchain embodies the evolution of trust in computing and financial systems and also provides broader access to them. We believe that decentralized systems are still in their early stages of development. We see the adoption of such systems and we see many interesting activities," said managing partner Andy Weissman.
All this is happening at the stage of the correctional course for Bitcoin, as it already happened in the fall of last year when major players used the correction as an advantage in the market.
As soon as the correction is over, and it is over, there will again be reports that mega-players have increased their portfolio and become even richer and more successful.
If we proceed from the Bloomberg analysis, then the interest of financial institutions in crypto assets is still at the very beginning of the path. The value of Bitcoin is not yet large enough to panic about a reversal. Taking into account the interest in new types of assets, the rate of the first cryptocurrency may reach $100,000 in the medium term.
General background of the crypto market
When analyzing the total market capitalization of the crypto industry, it is worth starting with the fact that the $1 trillion milestone has already been passed during the period of January. This is a success that has been expected for years, the absolute maximum opens up a new path for us, it should be noted that this result is the merit of Bitcoin. Now imagine what will happen if we see something similar to Altcoin, capitalization just goes off scale. At this time, due to the correction, the Total market dropped slightly to $923 billion, but is still at a height, and it is enough to remember that at the beginning of December, the Market Cap was only $550 billion.
The index of emotions (aka fear and greed) of the crypto market is at a consistently positive level of 78 points. The loss of profit syndrome temporarily subsided due to the correction, but as soon as we return to the maximum for Bitcoin, the syndrome will return again.
Indicator analysis
Analyzing different sectors of timeframes (TF), it can be seen that the indicators of technical instruments on a four-hour daily period signal a sale because the quote is in the correction stage. The weekly period, as before, is focused on an upward trend, signaling a buy
Performed by Gven Podolsky
Analytical expert
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