Bernstein has just INCREASED his price target for BTC:
- 2016: US$150,000
- 2027: US$200,000
- 2033: US$1,000,000 😳
Grayscale's arguments, published in their November report.
1/ "The supply of Bitcoin will always follow a four-year cycle, but prices will not necessarily."
Historical Price Drops
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Bitcoin has fallen by +10% approximately 50 times since 2010.
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The average price drop from peak to trough is between 25%-30%.
2/ There are 2 types of Bitcoin price drops:
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Cyclical drops: large and prolonged price declines.
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Bull market drops: average price declines of ~25% and lasting 2 to 3 months.
These occur 3 to 5 times a year during bull markets.
Like any other asset, its potential return is a compensation for its risk. And for Grayscale, the current drop may just be a typical drop.
3/ Why this cycle might be different?
Grayscale's arguments:
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First: unlike previous cycles, there hasn't been a parabolic price increase.
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Second: Bitcoin's market structure has changed, with new capital entering primarily through ETFs and digital asset treasuries (DATs), rather than retail exchanges.
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Third: the macroeconomic scenario still appears favorable.
4/ Bottom Line Signs
Grayscale highlighted the current asymmetry in Bitcoin put options, suggesting that investors have already largely hedged against exposure to downsides.
5/ Macro
In the short term, for Grayscale, the main driver of fluctuations will likely be whether the Federal Reserve cuts interest rates at its December 10 meeting and what guidance it offers on monetary policy rates for the coming year.
Kevin Hassett as a replacement for the Fed chairman could also be a great catalyst.
6/ In summary:
- Stable long-term institutional capital
- Improving regulatory environments
- Global macroeconomic liquidity
- A growing group of investors committed to the long term.
"Until these factors change, market pullbacks are likely to be temporary and, in our opinion, cryptocurrency markets may be on track for new highs."