In a report released Wednesday, senior commodity strategist Mike McGlone wrote that the leading cryptocurrency could reach $ 50,000 in the upcoming sessions.
Stating that it has the ability to hold Bitcoin in the $ 30,000 – $ 40,000 range during the recent retreat move, the analyst noted that $ 30,000 in particular serves as a solid support base to attract institutional investors.
The reason that pushed institutional investors to Bitcoin
As for what drives institutional investors closer to Bitcoin, McGlone has highlighted the “extensive evidence” that funds are pouring from underneath to crypto markets.
Abnormally low interest rates, rising debt to GDP ratio, and global quantitative easing provided strong winds to bitcoin price. With a limited supply capacity of only 21 million tokens, the cryptocurrency has experienced a dramatic increase in its demand as a safe haven asset.
Meanwhile, traditional investors chose gold, whose value reached a record high in 2020 against inflation scares.
McGlone stated that institutional investors are starting to take risks in the Bitcoin market through the Grayscale Bitcoin Trust.
Capital flowed into Grayscale’s Trust fund as it continued to accumulate more Bitcoin to support its security offerings. Meanwhile, gold ETFs have experienced a retreat.
A new valuation
Institutional adoption of Bitcoin tends to increase further as its volatility declines to levels of other traditional markets such as gold and stocks. Meanwhile, McGlone pointed out that the volatility of the cryptocurrency could drop even below that of the precious metal, making it a more attractive safe haven asset by 2025.
Stating that the cryptocurrency can add another zero against gold, he says, “260 days of volatility in Bitcoin is very similar to the beginning of 2017”.
According to McGlone, the $ 50,000 price tag depends on institutional investors entering more areas.