In the opening month of 2021, Bitcoin was on a roller coaster ride. After breaking through $41,000 at the beginning of the year and then falling below the $30,000 barrier, it is currently fluctuating around $34,000, and investors are actually experiencing both the ice and fire of investing. In the face of bitcoin’s ups and downs, the market attitude is also polarized, so how do industry analysts and well-known investment institutions view the market?
Investment institutions and Twitter celebrities: prices may soar
First of all, the most recent strongest callout representatives are WSB Chairman and Musk.
On January 28, 2021, WSB Chairman, the opinion leader of the WallStreetBets forum, the protagonist of the GameStop event that only recently rocked the U.S. stock market, tweeted a “call out” on cryptocurrencies. The WSB Chairman has mentioned cryptocurrencies and bitcoin several times in recent days. He tweeted several times that the age of cryptocurrencies is upon us, that cryptocurrencies have the best use case since their inception, and using bitcoin is the only way to attack Wall Street.
(Note: WallStreetBets Chairman account profile says this account has nothing to do with reddit/Wallstreetbets official)
In an interview with U.S. social media outlet Clubhouse on Feb. 1, Beijing time, Tesla CEO Elon Musk said, “Bitcoin is a good thing, and, I’m a supporter of bitcoin.” Musk says he had a share of the bitcoin trade in 2013 and that many of his friends have been trying to convince him to buy and sell bitcoin for years. He also says he should have bought bitcoin at least eight years ago and admits he was late to the feast. Musk believes that bitcoin is on the verge of being accepted by the traditional financial community. It’s worth noting that on Thursday, January 29, Elon Musk changed his Twitter profile to just “Bitcoin”.
In terms of investment institutions, ARK Investment is one of the most talked-about investment firms in the US market in recent years due to its bets on Tesla and Bitcoin, and its investment moves have become the focus of investors’ attention. As a result, ARK Investment founder Catherine Wood has been hailed as the next generation of female stock goddesses, and people are paying extra attention to her investment ideas.
According to new research from ARK Investment, the price of bitcoin could rise sharply as more companies allocate some of their money to bitcoin. ARK also says that if “all S&P 500 companies allocated 1% of their cash to bitcoin,” the price of bitcoin would rise by about $40,000. million. As support for the Bitcoin network continues to grow, this scenario is not entirely unrealistic. At current values, an additional $40,000 would bring the price of Bitcoin closer to $73,000.
BTC Bullish analysts: more capital ready to flow into BTC
LeislEichholz, an analyst at blockchain analytics platform Glassnode, lists a series of bitcoin upside signals, including the stablecoin supply ratio (SSR), that portends a rally in the cryptocurrency market. SSR is the ratio between bitcoin supply and stablecoin supply. Glassnode notes that if the SSR is lower, then, current stablecoins have more purchasing power to buy bitcoin. Conversely, a high SSR index reflects the selling pressure brewing in the bitcoin market. “BTC’s SSR has been declining in 2021 as more stablecoins are minted. When SSR is low, this means there is a large supply of stablecoins relative to BTC, which indicates more buying power ready to flow into BTC and other assets.”
Cryptocurrency analyst and economist Alex Krüger posted a series of tweets saying, “The bitcoin bear market has two components: macroeconomics and miners. On the macro side, if the dollar reverses its major downtrend, this will hurt bitcoin quite a bit. I don’t think either scenario will happen in 2021, but it’s important to keep an eye on those. On the miner side, we have to consider the miner cycle. Consider that the number of costs for new bitcoin mining is much larger at current prices than it was before the halving. I remain bullish, but it’s important to remember the bearish case. The flow of miners ensures that the price won’t go straight up for too long, which is why one shouldn’t get too bullish later in the year. At some point, the surplus of miners will have to be flushed out.”
In addition, cryptocurrency trader and market analyst Elliot Wainman predicts that altcoins may be about to soar. Wainman predicts that DeFi assets will continue to perform well in the near term, with the potential for an exponential rally. He gives his top picks as API3, Marlin (POND) and Allianceblock (ALBT), and Wainman is also bullish on NFT, saying the nascent market has strong fundamentals.
Bearish Analyst: Bitcoin Is Just a Puff of Vapor
Wall Street “all-star” analyst Andy Kessler published an article in the January 31 Wall Street Journal’s Opinion section titled “Behind the Bitcoin Bubble”. In the article, he said: “Bitcoin is nothing, it’s vapor, a concept of an idea. Transactions using bitcoin are few and far between. It’s not a store of value — anything that drops 30% in a week can’t play that role. But we get Bloomberg Wealth stories saying: ‘Newbie Bitcoin investors tell us what inspired them to buy at record prices.’ A lot of folks who can’t afford it may get hurt badly. Robinhood curbed some crypto purchases on Friday. So all crypto eyes are on mid-February. The power of the subpoena is strong. I have no insight into what New York’s attorney general will find. She might close the investigation and go on her merry way because there’s no crime, or uncover a fraud that could make Bernie Madoff look like he was stealing from a lemonade stand. We know what happens to bubbles when the hot air runs out.”
OKEx Research believes that, as things stand, the bitcoin bull market may have long since passed its peak and is now in a bull to bear phase. At its simplest, from the cryptocurrency market investors’ favorite technical analysis, the bitcoin price trend has changed from an uptrend to a downtrend since early January, when the price broke through $40,000 to hit a new all-time high. Until now, the bitcoin price has still failed to break above the upper resistance line, indicating that the downtrend will still continue.
Let’s look back at the beginning of the current bull market, there is now a consensus in the market that the market has high inflation expectations for the future due to the easing monetary policies of major global central banks, which in turn attracted institutional investors to enter and buy bitcoin, thus bringing about the current round of bitcoin bull market. To this day, there are still many people who hold this as a truth to increase their bitcoin holdings. However, is this really the case?
The market is currently starting to diverge on future inflation expectations. This is because the economic recovery will be driven by the launch of vaccines in various countries, including the fiscal stimulus brought by the new US administration coming to power. Under the dual pressure of expected economic recovery and high inflation expectations, the market speculates that major global central banks will gradually withdraw from their existing easing policies. This is not impossible, but there is a high probability. Most notably, recent speeches by Chinese central bank officials about a possible shift in monetary policy and the fact that the central bank’s open market operations have been net withdrawals for the last three days have reflected such trends.
Secondly, on the regulatory front, until now, people in the cryptocurrency market still see Gary Gensler’s election as the SEC chairman as a big positive for the cryptocurrency market. The reality, however, is that government officials represent a particular policy position of the government, not individuals; it is not “what Gary thinks”, but “what the government Gary represents thinks”.
At present, the Democratic Party has taken the White House and the majority of seats in both houses of Congress, achieving “full rule”. The Democratic Party is a left-wing party that emphasizes big government and advocates stronger financial regulation and higher taxes. Even though Gary is familiar with cryptocurrencies, if you think Gary will be lenient with the regulation of cryptocurrencies, it is just an unrealistic fantasy and an “ ego boost “ of some people in the cryptocurrency circle.
In the investment world, it’s important to face reality and keep your sanity. Is it possible that bitcoin will not rise in the future? Of course, there is, but from the current reality, we can’t see the factors driving the price of bitcoin up. Instead, looking at the bubble cycle, the bitcoin market has now shifted to a panic recession phase.
What do you think about the aftermath of Bitcoin and the crypto market as a whole? Feel free to leave a comment to discuss.
Article from Meio
Translated by Yang(Mengyan Finance)