For Mike McGlone, senior strategist at Bloomberg Intelligence, the price of bitcoin (quotation BTC) is extremely lower than it should be and the asset is "extreme discount".
At the time of this publication, the price of bitcoin is US $ 23.235. The currency created by Satoshi Nakamoto is trading 66% below the all-time high of $ 68.789 reached on 10 November.
Although McGlone does not make any price predictions, he believes this "cryptowinter" is simply a correction in a broader bull cycle.
"Bitcoin and cryptocurrencies were a key part of the 2021 upside and thus the 2022 shock, but I see bitcoin and Ethereum in the lead," he says. Furthermore, he foresees two very specific roles for the two aforementioned cryptocurrency networks:
"Bitcoin is on its way to becoming a global digital collateral and Ethereum is a primary engine of the digital revolution, as demonstrated by the fact that it makes possible the most traded cryptoassets: tokens that maintain parity with the dollar." - Mike McGlone, Bloomberg Intelligence strategist.
The price of bitcoin encounters some obstacles
Although the Bloomberg specialist's expectations can be met in the long term, the price of bitcoin still faces some challenges in the short and medium term. As reported, the arrival of institutional investors means that its price is highly correlated to that of traditional markets such as the S & P500 and Nasdaq.
For this reason, bitcoin does not escape the macroeconomic and socio-political issues that drive the global economy. Conflicts between the US and China, which have intensified in recent weeks, could have an impact on the price of BTC.
In a report published by this media at the end of last week, trader Alberto Cardenas explained that, according to him, BTC has not yet hit the bottom of the current bear cycle. “The main reason is that we are in a cycle of liquidity reduction that has not ended. Especially due to the tightening of the rates of the two main central banks (in the United States and Europe), ”he explains.
Furthermore, according to Cárdenas, “[military] conflicts can exacerbate the problem that the markets have right now, namely inflation”.
On the other hand, there are those who believe that an international conflict can benefit bitcoin. For economist Natalia Motyl, consulted by us in the same report, "people will tend to take refuge in safer assets" than fiat money. In this context, several cryptocurrencies would benefit.
Bitcoin has always rewarded patient investors
While past price behavior cannot guarantee future investment returns, bitcoin has so far always rewarded its investors in the medium and long term.
As can be seen in the chart above, despite the high volatility, the trend over the 13-year history of BTC has been predominantly bullish.
