Bitcoin Price to Rise as it Captures Bigger Share of ‘Anti-fiat Market’ Driven by ‘Stimulated Environment’
“Strong” crypto performance leads to rising interest among institutions, including university endowments and foundations, a trend that will continue “at an accelerated pace,” says experts. As for the govt. banning Bitcoin, “Crypto Mom,” says that would be “foolish.”
Bitcoin is trading above $60,000, giving off strong bullish signals with traders getting in on this action.
According to Dhaval Joshi, chief strategist for BCA Research’s Counterpoint product, the price of Bitcoin will rise as it becomes a bigger share of what he calls the $15 trillion anti-fiat market, currently dominated by gold.
“So long as we have a fiat money system, there will be demand for an ‘anti-fiat’ asset that is a hedge against a debasement of the fiat money system,” said Joshi, who called cryptocurrencies “the new vigilantes to prevent rampant inflation.”
Currently, Bitcoin accounts for 10% of this anti-fiat market but, “as this share doubles or trebles, it arithmetically requires a doubling or trebling of cryptocurrency prices.”
He recommends investors to hold $1 of crypto for every $3 of gold, which implies 25% of the precious metal market, putting BTC at $120k.
The prices are rising as the institutionalization of the crypto space gains speed.
During a MarketWatch virtual panel discussion, “How to Invest in Crypto,” Tom Jessop, head of Fidelity Digital Assets at Fidelity Investments, said the maturation and adoption of digital assets as a class of investments would continue “at an accelerated pace.”
According to him, ultralow interest rate and easy-money policies helped drive momentum into bitcoin, which are increasingly being seen as alternatives to assets like bonds that offer meager yields.
“Pandemic, quite frankly, was a catalyst for institutional adoption, and specifically bitcoin and the narrative, or use-case, around digital gold,” Jessop said. And “we’re not going to get out of this stimulated environment anytime soon,” he added. “I think we’ve reached a tipping point.”
As Mark Yusko, founder and CEO of Morgan Creek Capital Management, told MarketWatch, “We really believe that we’ll look back five years from now, and it will be deemed fiduciarily imprudent to have zero exposure to digital assets.”
With Bitcoin becoming a trillion-dollar asset and total crypto market cap surging past $2.1 trillion, “you can’t ignore it anymore,” Yusko said. “I really think we are at an inflection point.”
According to him, crypto performance has been “so strong” that even a small allocation can make a big difference. And Yusko has seen a rising interest among institutional investors, including university endowments and foundations.
A Good Regulatory Framework
When it comes to the regulatory front, it might not be of big significance as SEC commissioner Hester Peirce says it would be “foolish” to ban Bitcoin.
“I think we were past that point (of banning Bitcoin in the US) very early on because you’d have to shut down the internet.”
“I don’t see how you could ban it. You could certainly make the effort. It would be very hard to stop people from doing it.”
“So I think it would be a foolish thing for the government to try to do that.”
According to her, technology is likely to outpace the government's attempt to limit the use of BTC.
During the panel discussion, while reiterating that the US remains “behind the curve” in regulating crypto, Peirce, aka “Crypto Mom,” said Gary Gensler as SEC Chairman might push it in the right direction.
“I’m optimistic with a new chairman coming in with a deep knowledge of these markets that is something we could do together—build a good regulatory framework.”