Bitcoin Price are going to be Golden in 2020 because of Limited Supply, Increasing Use: Bloomberg Report

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Bitcoin Price are going to be Golden in 2020 because of Limited Supply, Increasing Use: Bloomberg Report

Bloomberg's 2020 crypto outlook report, published Monday, predicts bitcoin's price could move to the highest of its 2019 range and retest the $14,000 high at a time when a weak dollar and stock exchange volatility continue and geopolitical tensions increase.

"Bitcoin's initial reaction to the [Jan. 3] U.S. airstrike that killed one among Iran's most powerful generals was an honest test of our premise that the first-born crypto is maturing toward a digital version of gold," reads the report. Bitcoin jumped to a seven-week high Wednesday as gold rallied to $1,600 for the primary time since 2013.

Bitcoin has long been seen as "digital gold," partially because it's a limited asset that can't be easily increased to satisfy changing demand, very similar to the alpha-beta brass . The halving event expected later this year will reduce block rewards from 12.5 to 6.25 BTC, further adding to provide pressures should demand still grow.

Bitcoin's supply is projected to grow by about 2.5 percent in 2020, which might be an rock bottom . That's partly thanks to the halving of the block reward – from 12.5 to 6.25 BTC. Supply in 2021 could well fall below 2 percent, analysts say.

Increasing investment in bitcoin could take many forms, believe the analysts. The rapidly expanding derivatives market – a symbol of integration into mainstream markets – will better enable institutional investors to realize exposure to the asset class. that would have knock-on effects on price and decreasing volatility, thereby reinforcing bitcoin's status as a store useful .

Not most are convinced bitcoin and gold share such a robust bond. Mati Greenspan, founding father of Quantum Economics, which focuses on cryptocurrencies and exchange , called such a relationship "weak" and noted the correlation between the 2 assets was negative until recently.

Bitcoin has also been susceptible to periods of short, sharp volatility. The asset surged up above $10,000 after President Xi of China involved his country to accelerate its adoption of blockchain technology before retracing its former range weeks later. for a few analysts, that volatility fundamentally undermines the case for bitcoin being a stable store useful , a minimum of for the nonce .

But while bitcoin should be too volatile for several people's liking, it appears investors within the asset class are increasingly valuing digital assets which will maintain some kind of stable price. The Bloomberg report predicts that tether's market cap will likely continue expanding this year, with many various cryptocurrencies struggling to stay investors as supply outstrips demand.

"Bitcoin should again outshine most crypto assets in 2020 because the unique and appreciating digital version of gold," the report continues. "Bitcoin is winning the adoption race, notably as a store useful in an environment that favors independent quasi-currencies."