Having observed a confluence of positive signals that imply upward continuation, analysts are leaning bullish on Bitcoin ahead of the halving.
With the scheduled arrival of Bitcoin’s halving now just days away, recession fears have done little to nullify hype around the event.
In fact, many crypto pundits are suggesting that there is plenty of oxygen to drive the market to $10,000 even before the halving.
The top cryptocurrency is currently enjoying the wind in its sails. Its recent bull-run and 15% spike in value over the past week alone has ushered in the return of ambitious price targets following the halving.
The gut-wrenching volatility of Bitcoin has never been more apparent than in the last few months.
At the time of writing, the flagship cryptocurrency’s decisive break through the $9,000 mark positions its market cap above $170bn.
However, the cryptoasset, which soared as high as $10,500 in mid-February and dipped as low as $3,800 the following month, has now rebounded in spectacular fashion.
Not only has Bitcoin erased all the losses from the coronavirus sell-off in March, but it has starkly outperformed every major traditional market in 2020 – including gold, and resurrected the controversial digital gold narrative that suffered a major blow during the recent downtrend. Conversation in the digital asset sector is also turning to Bitcoin’s role in the unprecedented monetary and fiscal stimulus unleashed by central banks around the world.
Dmitry Tokarev, CEO at Copper, believes that further down the road, this fiscal and monetary stimulus will likely set off a bout of inflation.
He commented: “We are all witnessing the most extensive quantitative easing programmes ever seen to mitigate the effects of coronavirus on the markets. Gold aside, the list of alternative assets to consider as a hedge against uncertainty in the global markets are far and few between. There are some early signs suggesting that investors are turning to cryptocurrencies, both as a key tool of diversification and a hedge against the inevitable uncertainties to come.”
On Thursday 7 May, it was announced that Paul Tudor Jones, one of Wall Street’s most-successful and seasoned hedge fund managers, is buying Bitcoin as a hedge against the inflation he believes is coming due to central banks printing money. In a market outlook note he entitled ‘The Great Monetary Inflation’, Jones told his clients.’ “If I am forced to forecast, my bet is it will be Bitcoin.” He also reportedly mentioned that the cryptocurrency reminds him of the role gold played in the 1970s.
His comments came as the UK’s central bank issued a statement to declare that its monetary policy committee had voted unanimously to keep the interest rate at 0.1%. The BoE’s statement painted a bleak picture of the UK economy, referencing a more unpleasant kind of halving on the cards; in the short term, the central bank predicts a halving in business investment as well as a near halving in business sales.
Tokarev said: “With the financial markets currently plunged in chaos and ambiguity, the imminent Bitcoin halving presents a glint of certainty in the short-term. You will note the irony here.”