Bloomberg Says Bitcoin Will Hit $14,000 in 2020 Thanks to Gold

by
Will Heasman
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• Bitcoin equals digital gold, according to Bloomberg report.
• Altcoins set to suffer in 2020.
• The futures market will aid mass adoption.

Bitcoin is going to boom this year. That’s the verdict, according to Bloomberg’s crypto’s outlook for 2020.

Within the recently published report, Bloomberg market analyst Mike Mcglone outlines exactly how BTC can attain its 2019 high. Spoiler alert: it’s mostly to do with a correlation to gold.

Bitcoin isn’t called “digital gold” for nothing. Its association with the precious metal has been religiously quoted by cryptocurrency experts and enthusiasts alike for years—and for good reason. The flagship cryptocurrency holds innumerable qualities that mimic the yellow metal. They’re both “mined.” They’re both transferable. They can both be divided. But most importantly, they’re both limited assets and are arguably most comfortable as safe havens.

One Man’s Bitcoin Is Another Man’s Gold

This is one of the critical points raised in the Bloomberg report. Mcglone characterizes 2020 as a prime year for safe-haven assets, suggesting that movements in gold will act as a proxy for BTC’s price performance.

The analyst specifically highlights the recent uptick in bitcoin’s value following the U.S. sanctioned killing of top Iranian general Qassem Soleimani:

Bitcoin’s initial reaction to the [Jan. 3] U.S. airstrike that killed one of Iran’s most powerful generals was a good test of our premise that the first-born crypto is maturing toward a digital version of gold.

Shortly after the fallout of Soleimani’s death, both bitcoin and gold rallied. The precious metal reached a seven-year high of $1,600, while its digital protege followed, netting a 20% rise.

Providing yet more evidence for bitcoin’s standing as a safe-haven asset is its correlation—or lack thereof —with the U.S. dollar. Per the report, bitcoin shows “the greatest-for-longest Bitcoin-to-dollar negative 52-week correlation” witnessed since 2010. This relationship is much the same between gold and the greenback as it is for BTC and USD.

Bitcoin’s Gain Is Bad News for Altcoins

On price action, the report remained quietly optimistic, communicating that BTC will appreciate within its 2019 range. While ruling out a return to an all-time high, analysts see bitcoin edging towards $14,000 once again.

The rest of the market is set to stagnate, with market saturation at the root of the problem:

Too many crypto-assets competing for adoption will keep broad market prices biased to the downside, in our view. A future of appreciating prices for cryptocurrencies is unlikely until rapidly increasing supply is curtailed.

Mainstream Adoption on the Horizon

Due in part to its status as a hedge against global risk, bitcoin is supposedly “winning the adoption race.” The report relays that last year’s market trend of bitcoin dominating altcoins will continue in 2020.

According to Bloomberg, adoptive figures are measured by a burgeoning interest in derivative trading:

In our view. Futures trading represents mainstream adoption, which is a primary metric for the world’s benchmark digital store-of value, quasi-currency with limited supply.

Despite its lackluster beginnings, Bakkt—the long-awaited futures brainchild of from the Intercontinental Exchange—is finally performing. Just last month, it managed to break its previous all-time high after shifting $47 million worth of its physically-settled bitcoin futures contracts. Fundstrat’s Tom Lee appears to share McGlone’s sentiment, tweeting that Bakkt’s rising volume a “pure proxy for institutional demand for bitcoin.”