Bitcoin was able to close the past year 2019 with a substantial price gain of 94%. But what will happen in 2020? After a strong start to the new year and a fight back from USD 7,000 to USD 9,000, BTC’s share price has dropped back below the important threshold in the last few days. Currently the Bitcoin price is endowed with just under 8,400 USD. But this does not have to be the end of the story. At least, if one is to believe a new report from Bloomberg. In a detailed analysis Bloomberg speaks very positively about the digital asset and attests the “digital gold” another strong year due to many factors. We summarize for you.
Bitcoin with profits in 2020 according to Bloomberg
It is no secret that this year will be an exciting one for Bitcoin. Last but not least, there’s the Halving in May, which, due to its rarity alone, is causing a stir far beyond the borders of the crypto community. But it gets even better: Bloomberg recently published a report called “Bloomberg Crypto Outlook – January 2020 Edition”.
In it, the authors confirm the thesis that 2020 could be another strong year for BTC with price gains. Bitcoin will probably not experience a parabolic growth phase this year like in 2017 and will not reach a new all-time high. On the other hand, the price could move positively towards the USD 14,000 mark, which was already tested in 2019. Bloomberg sees some good reasons for this, which we will take a closer look at below.
More adoption, more demand, less supply
Bloomberg sees the first big reason for the above developments and the forecast in the simple fact that Bitcoin seems to be more and more becoming “digital gold” and a store-of-value. Due to this clear use case, an increasing adoption of digital assets is only a matter of time.
At the same time, Bitcoin’s inflation rate continues to fall. This will be around 2.5% in 2020 and will continue to decrease until it reaches 0% at some point. Of the 21 million BTCs, the majority (over 18 million) have already been generated. A higher demand and a decreasing supply must end in higher prices at some point. So Bloomberg writes in her report:
“The fact that a store of value with a fixed supply and increasing acceptance is more likely to increase in value, we believe Bitcoin will continue to support in 2020.”
Bitcoin wins the race for adoption
One form of adoption that Bitcoin is already experiencing is the increasing dominance of King Coin. According to Bloomberg, “Bitcoin seems to be winning the adoption race. This was already evident in 2019, when BTC outperformed most of the other top coins. This trend could continue in 2020.
The authors cite the “Bloomberg Galaxy Crypto Index” (BGCI) as an example. This index (despite a BTC share of 30%) only rose by about 10% in 2019, while Bitcoin rose by over 90%:
“Bitcoin is the main reason for the positive BGCI performance.”
According to Bloomberg, another expression of the increasing Bitcoin adoption is the fact that there are more and more financial products around BTC that are experiencing an ever-increasing demand. This speaks for the “maturing” and “institutional commitment” to Bitcoin.
Gold, Golden, BTC
Bloomberg places particular emphasis on the comparison of Bitcoin with gold in justifying its forecasts. However, the authors do not simply see the fact that Bitcoin is designed as “digital gold”, but rather an increased correlation between the precious metal and BTC:
“Bitcoin’s initial response to the U.S. air strike, which killed one of Iran’s most powerful generals, was a good test of our premise that the first crypto [Coin] would mature into a digital version of gold.”
Chances are good that the price of gold will continue to rise in 2020, which also points to rising Bitcoin prices:
“The price of gold will continue to rise in 2020 and we believe Bitcoin should do the same.”
As we see from Bloomberg’s analysis, there are many reasons for a positive Bitcoin year 2020. This of course pleases every BTC fan. Another positive point, even without a rising share price, is that an established news and media company like Bloomberg is dealing with Bitcoin at all, and then again, so positive. So we can be curious what else will come in 2020, so far it looks good.