Grayscale Investments has announced that the price of bitcoin could potentially explode in the coming months given how much bitcoin is mimicking its 2016 behavior.
Grayscale: Expect Bitcoin to Be More Bullish
In a recent report, the institutional crypto trading platform writes:
The current bitcoin market structure parallels that of early 2016 before [bitcoin] began its historic bull run. Amidst unprecedented monetary and fiscal stimulus, investors are searching for ways to protect against an ever-expanding monetary supply. Because of bitcoin’s unique qualities – such as its verifiable scarcity and a supply that can’t be controlled by a central authority – we believe it can be leveraged as a store of value and as a way to escape this great monetary inflation.
In looking at Grayscale’s words, it’s easy to assume that the company – like many analysts and traders nowadays – sees bitcoin as a potential “safe haven,” or something that can hedge one’s wealth against harsh economic circumstances. The economy of the United States, for example, has been hit hard over the past several months given the coronavirus pandemic. The U.S. dollar has also been weakened.
Thus, bitcoin can potentially give people access to financial stability that traditional fiat currency no longer can, and Grayscale is pointing out several factors in bitcoin that could cause the price to surge even further.
But if that’s true, then why is bitcoin falling as of late? The currency has experienced something of a snag in its recent wave of good luck. The asset quickly hit the $12,400 mark earlier in the week, but this didn’t seem to last long. The currency then fell as low as $11,500, meaning nearly $1,000 in its price was lost. At the time of writing, the currency has settled into the $11,600 range.
On top of that, bitcoin’s bearish behavior appears to be rubbing off on other top coins. Recently, Chainlink (LINK) was proving itself as a top altcoin after having moved into the top five and garnering a market cap of roughly $20 million. One unit of LINK was trading for over $20, though at press time, the asset’s price has fallen by as much as 25 percent, meaning it is suffering even more than bitcoin.
Why all the sudden changes? Were the spikes just too much too quick? Did these coins need more time to prepare, and could we potentially see more drops before Grayscale’s predictions come true?
Some Temporary Setbacks?
Joe DiPasquale – chief executive of crypto hedge fund Bit Bull Capital – suggested that this all may be temporary, and that bitcoin is about to become more bullish than anyone could anticipate. He says:
Bitcoin’s recent price action really took off from the $10,000 level, indicating market confidence in the big move at the end of July. Moving forward, we can expect the market to lean on the support zone between $11,000 and $11,500 to consolidate and try another push above $12,000.