The Bitcoin ‘break out’ case is stronger than ever – despite the cryptocurrency’s price dropping 12% over the last seven days, affirms Nigel Green, chief executive and founder of deVere, one of the world’s largest fintech organisations.
This is after the leading digital asset fell to around $10,000 over the weekend. Mr Green notes that crypto cynics and finance traditionalists will use the current – and temporary – fall in Bitcoin as an excuse to knock its inherent strengths to fit their own agendas.
“However, the reality is that the case for Bitcoin to break out this year is stronger than ever,” he said on Monday.
He added that the first reason is about record-shattering stimulus initiatives, where overnments and central banks around the world are continuing to prop-up their economies. Just last week France announced a new $100bn package.
“The off-the-scale level of money printing drastically devalues traditional currencies, which serves to boost the price of Bitcoin as investors look for viable alternatives.
“The stimulus agendas are unsustainable in the longer-term and there’s a potential inflation issue looming. Investors know this and are revising their portfolios accordingly,” he said.
The second reason is that the uncertainty created by the US.presidential election is going to intensify between now and November 3. Investors will pile into safe-haven assets, which are not tied to any specific country, such as Bitcoin and gold.
But perhaps even more important are the underlying fundamentals. “Bitcoin’s price will remain on an upward trajectory in 2020 and beyond because the fundamentals haven’t changed– namely that cryptocurrencies are the future of money.”
“Cryptocurrencies like Bitcoin are digital and global. We’re going through a tech revolution but it is also about demographics. Younger people, who are of course the future, have always lived in a digital era, so using digital currency is going to be second nature, he explained.
In addition, an acceleration of institutional investment which is likely to be driven by greater regulatory clarity, could be witnessed.
“For instance, Bermuda last week took another step towards cementing its drive towards crypto by testing a digital token, which can be used to buy food and other essentials.”
More and more global jurisdictions can be expected to join the likes of Malta, Hong Kong, Japan, Switzerland – and now Bermuda – in becoming crypto-friendly from a regulatory and pro-business viewpoint.
The institutional expertise and capital could bolster prices significantly, and the fundamentals that make Bitcoin an attractive investment are, in fact, gaining strength.
“If anything, the drop in price below $10,000, which is a critical psychological level, will be used by investors as a key buying opportunity – especially given that Bitcoin has soared by about 70% year-on-year, making it one of the best-performing assets of 2020.”