The Top Four Price Targets Set By Bitcoin Bulls In 2021

L.The past week has been a wild ride for Bitcoin (BTC) Investors. Bitcoin’s price fell as much as 40% from its all-time high, and analysis on the chain shows that most of the sales came from new account holders. Regardless, many respected financiers remain optimistic about Bitcoin’s investment thesis.

Bridgewater Associates founder Ray Dalio recently announced in his interview with CoinDesk that he has Bitcoin in his portfolio. Why? His thesis is similar to many other analysts, in which he points out that the US dollar is on the verge of depreciation at the level last recorded in 1971. Dalio said: “Personally, I would rather have Bitcoin than a bond.”

Bitcoin’s relative value versus gold is another indicator that Dalio watches. He estimates that gold is worth about five times that of Bitcoin, excluding government reserves and jewelry uses. “Right now it’s about 80/20 in the world so I would see that too. But I think these things are likely to go up compared to bonds. “These two reasons – Bitcoin as a deflationary asset and its relatively low acceptance rate compared to gold – are also the main thesis behind the price targets set by well-known investors.

JPMorgan: $ 130,000

JPMorgan believes that stronger institutional adoption of Bitcoin will be the biggest driver behind Bitcoin’s price increase. To support this, JPM looks at the number of gold outflows. Since mid-October, gold has seen $ 20 billion in cash outflows versus $ 7 billion in cash inflows for Bitcoin over the same period.

“Given the level of financial investment in gold, such displacement of gold as an ‘alternative’ currency means a big upward trend for Bitcoin in the long run,” JPMorgan said.

As a result, the bank decided on a long-term one Bitcoin price Target of $ 130,000. JPMorgan warns that its price target is based on the idea that Bitcoin’s volatility will converge with that of gold. The reason is simple. The bank assumes that the lower volatility will lead to more institutional support. However, this can take some time. The three-month volatility for Bitcoin was recently 86% compared to just 16% for gold. So JPMorgan said, “The theoretical $ 130,000 Bitcoin price Goal should be seen as a long-term goal. “

Tom Lee: $ 120,000

After the recent Bitcoin sell-off, Wall Street strategist Tom Lee joined CNBC to reiterate its bullish year-end Bitcoin price target of $ 120,000. Lee, co-founder and head of research at Fundstrat Global Advisors, said investors need to be familiar with Bitcoin’s volatility. “Bitcoin volatility is systematic for the network itself. I think anyone who buys Bitcoin needs to be aware that it will always be hypervolatile. This is the opportunity. “

With regard to his price target thesis, he believes that 2021 will represent a similar structure for Bitcoin to 2017: a parabolic rally that takes place after a halving event. Bitcoin, of course, had a halving event last year. Halving events make Bitcoin a deflationary asset that is becoming increasingly scarce over the years. Given the inflationary environment, Lee believes that Bitcoin is a rare store of value that counteracts inflation.

Wave Financial: $ 400,000

Now we are entering super bullish territory. What does $ 400,000 per bitcoin sound like? That’s the price that analysts at Los Angeles-based investment management firm Wave Financial could think of Bitcoin. Wave Financial uses a stock-to-flow ratio, which is primarily a gold valuation model. In fact, this ratio said the movement of the Bitcoin price from $ 4,000 in March 2019 to around $ 50,000 in February 2021. The company states that the fact that this ratio works well with Bitcoin makes the thesis that Bitcoin is digital gold more believable.

In addition to its stock-to-flow model, Wave Financial agrees with Ray Dalio, referring to the current financial environment. “Because of the pandemic, governments around the world are printing money to stabilize and stimulate the economy.” This drives investors to use digital assets as a safe haven.

Cathie Wood: $ 500,000

Cathie Wood wins the award for the biggest Bitcoin bull as the founder of Ark Invest sets an incredible price target of $ 500,000 for Bitcoin. Wood believes the rise of central bank digital currencies will legitimize Bitcoin as a store of value, referring to China’s announcement of its own digital yuan. As a result, legitimacy will foster institutional acceptance. This is at the heart of Ms. Wood’s $ 500,000 goal as it is based on the scenario where all institutional asset managers allocate more than 5% of their portfolio to Bitcoin.

According to Wood, institutions have recently increased their exposure to cryptocurrency in what looks like “the beginnings of institutions penetrating real estate and emerging markets. They then started with an allocation of half a percent [1%]and then 5% or so seemed like the right number. “

If it becomes standard for all institutions to choose a mid-single-digit allocation for Bitcoin, the cryptocurrency could rise “anywhere in the range of $ 400,000 to $ 500,000,” Ms. Wood said.

The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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