Bitcoin can reach $400K in 2021 as ‘risk-off reserve asset’ — Bloomberg

by Gordon James

Bitcoin (BTC) is always criticized for being too volatile, but a Bloomberg analyst believes it is becoming just the opposite of a risky choice for investors.

In a tweet from 25. March, Mike McGlone, senior commodities strategist at Bloomberg Intelligence, said this year was a turning point for the largest cryptocurrency.

$400,000 BTC rhymes withhistory.

McGlone downloaded a chart of the average price of BTC/USD and the Bitcoin Liquid Index, a price sticker made specifically for institutional use.

…On its way to becoming a global digital reserve asset, a 2021 maturity jump could make bitcoin a risky asset, he writes.

The maximum price this year, all other things being equal, could be as high as $400,000 per coin, depending on context, as shown in the chart. For example, this is more than the reserve estimate, which averages $288,000 through 2024.

Graph of BTC/USD price index. Source: Mike McGlone/Twitter/Bloomberg Intelligence

Although McGlone did not provide details on the factors behind Bloomberg’s opinion, the idea that bitcoin lowers rather than increases portfolio risk is the topic of the year among companies. There are always new reports of treasury allocations to BTC whose appetite for price action is unpalatable.

My mission now is to straighten out the world’s balance sheets, Michael Saylor, CEO of MicroStrategy, one of the largest investors in bitcoin, told TIME this week.

According to Bitcoin tracking tool Treasuries, Saylor sparked a trend among public companies last summer that saw more than $52 billion converted into BTC on a cost basis and is now worth more than $73 billion.

What are the risks?

While Morgan Stanley next week becomes the first major bank to open bitcoin funds to high net worth investors, skeptics continue to make familiar arguments against the commitment.

The fact that Morgan Stanley limits access to cryptocurrencies to 2.5 percent of the accounts of high net worth individuals with more than $2 million in assets who have been active for more than six months shows that the bank understands that bitcoin is very risky and wants to limit the legal liability of investors who lose money, The Gold Bug’s Peter Schiff said recently.

Meanwhile, Fed Chairman Jerome Powell, much to Schiff’s chagrin, compared bitcoin to a gold substitute, but added that it posed no risk to the dollar or financial stability.

As Cointelegraph reports, the average return on BTC/USD has been over 200% every year since the cryptocurrency’s inception.

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