Bitcoin is headed for a new bull market and will achieve “mass market adoption” within five years, according to a new report from two prominent analysts.
“We expect for Bitcoin to trade in a range of US$3,000 – $6,500 until the new bull market permanently cements the denarian cryptocurrency as a multi-trillion dollar asset class,” the report said.
The researchers say their predictions are based on several observations:
- Blockchain analysis shows Bitcoin whales are accumulating
- There are “significant parallels” with the 2014/2015 bear market
- ‘HODLers’ (Bitcoin holders) are almost at break-even
- Bitcoin’s fundamentals remain strong
- Recent volatility lows suggest reports the market could be bottoming are correct
The authors of the report say they pride themselves on having published their 2012 and 2015 reports during what they perceived as “periods of significant undervaluation.”
“Each report was issued when Bitcoin was down more than 80% from all-time highs,” the report said.
“Now, at 75% below its 2017 all-time high, we believe the current bear market represents an exceptional opportunity for value investors.”
The authors of the report offer no guarantee the Bitcoin price won’t hit new lows, but they say any such move would be temporary.
“While lower prices are still possible, Bitcoin’s fundamentals are gaining momentum,” the report said.
“Embraced by millennials, its ecosystem is developing at rapid clip, both as a decentralised bottom-up disruptive technology, and as an uncorrelated, highly liquid financial asset for institutional portfolios around the world.”
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The report suggests Bitcoin is in the “last stage” of the bear market and the current sentiment has recovered from the “capitulation” phase.
“The blockchain shows us that Bitcoin HODLers are committing for the long term again,” the report said.
“This is confirmed by our drawdown and volatility analyses.”
The authors believe that the long term risk-reward ratio for Bitcoin is the most favourable of any liquid investment in the world.
“Supported by over 10 years of infrastructure development, we believe the stage is set for mass market adoption in the coming five years,” the report said.
The authors say Bitcoin will have the equivalent of Microsoft’s ‘Window’s moment,’ where the digital currency will become “widely recognised as a portfolio hedging instrument and reserve asset, and will begin making significant inroads as a payment network.”