Some forecasts about the price of bitcoin made recently by authoritative analysts are causing a stir.16. November 2020
Most surprisingly, CitiBank MD and its director Tom Fitzpatrick are predicting that BTC’s price could reach a record $318,000 by the end of next year.
According to Fitzpatrick Bitcoin could have the right characteristics to become the digital gold of the 21st century.
This idea, of course, is not new at all, but it is very surprising that it is proposed by the director of Citibank, a historic financial institution founded in 1812 in New York, with over 2,600 branches in 19 countries around the world.
According to Fitzpatrick the inflation of the dollar, and its devaluation, can make it possible to make a comparison between bitcoin and gold, also because Bitcoin Circuit was born just after the great financial crisis of 2008, when, for example, interest rates dropped to zero percent for the first time.
The key point would be the possible next devaluation of the US dollar, which is still the world’s reserve currency par excellence.
In such a scenario, Fitzpatrick sees similarities with the gold market of 1970, whose assumptions were laid down in 1944 in Bretton Woods, and lasted until 1973.
In fact, the Bretton Woods agreements anchored the US dollar to gold, and the other currencies to the dollar, in an attempt to build a monetary regime in which the US dollar was equivalent to gold as a reserve currency.
In the course of time, however, a predilection of the markets for gold emerged in comparison to the dollar, so that in 1970 a sort of „gold rush“ was created, during which the holders of dollars hurried to exchange them for gold. In 1971, President Nixon interrupted the pegging of the dollar to gold, creating the new fiat currency regime.
This would have generated the first bullish bitcoin cycle, i.e. the one that started in 2011 and ended in December 2013, with a value increase of 555 times.
In addition, the current scenario looks similar to that of the financial markets at the beginning of the 1970s, i.e. the one that led to the gold rush.
According to Fitzpatrick a bitcoin race could start at this point, which could bring the price up to $318,000 by December 2021.
Discordant forecasts of analysts on Bitcoin
However, it should also be added that not all analysts are so bullish about bitcoin.
Although at this moment it is difficult to find authoritative downward predictions, there are analysts who assume a consolidation phase, with relatively stable price, or others who predict price increases of a much lower order.
In fact, to tell the truth the assumed figures for 2021 are so much different between them to reveal a remarkable uncertainty.
It is quite likely that the forecasts of the vast majority of analysts regarding BTC’s prices for 2021 are simply wrong, but it cannot be considered insignificant that very few believe that the price will fall, and in any case not many believe that it will lateralize.
In other words, bullish forecasts prevail, but there does not seem to be any convergence between them.