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The market might have failed to sustain Bitcoin’s recent rally past the $10,000 mark. However, an analyst remains bullish on the token’s price trajectory this year and expects to cryptocurrency to continue to soar with the possibility of even breaching $20,000 by the end of 2020.
This is the bullish prediction of Mike McGlone, Bloomberg’s senior commodity strategist who believes that, barring any untoward incident, the token’s price is likely to continue to climb higher for the rest of the year. “In the unlikely event of a significant change for the worst, we expect the bitcoin price to continue appreciating,” McGlone said, according to Forbes.
One reason that could push Bitcoin’s price upward is the easing by central banks. “This unprecedented year of central-bank easing is accelerating the maturation of the first-born crypto toward a digital version of gold while accentuating oversupply constraints in most of the market,” McGlone explained.
The coronavirus pandemic also accelerated the use of digital money instead of physical cash. The closure of physical stores meant that most people do their shopping online where they have to use digital cash to pay for their purchases.
McGlone also believes that the recent halving, where the number of bitcoin received from mining is cut in half, will also push the token’s price. In May, mining reward dropped from 12.5 bitcoin to 6.25. Historically, the cryptocurrency’s price soared after each halving.
“Bitcoin is mirroring the 2016 return to its previous peak,” McGlone said. “That was the last time supply was halved, and the third year after a significant peak. After 2014's 60% decline, by the end of 2016, the crypto about matched the 2013 peak. Fast forward four years and the second year after the almost 75% decline in 2018, bitcoin will approach the record high of about $20,000 this year, in our view, if it follows 2016's trend.”
McGlone isn’t the only one who sees bitcoin appreciating in the coming months. In fact, some believe that the cryptocurrency could be in the cusp of a “fourth crypto cycle.”
“The 2017 cycle spawned dozens of exciting projects in a wide range of areas including payments, finance, games, infrastructure, and web apps,” Andreessen Horowitz partners Chris Dixon and Eddy Lazzarin said. “Many of these projects are launching in the near future, possibly driving a fourth crypto cycle.”
