Following a massive correction, digital assets led by Bitcoin and Ethereum are on track for new highs, according to a new report from Bloomberg.
Bloomberg’s senior commodity strategist Mike McGlone has doubled down on call for six-figure Bitcoin (BTC), arguing that the first-born cryptocurrency is well on its way to becoming a global reserve asset that complements the United States dollar.
The September edition of Bloomberg’s Crypto Outlook called $100,000 BTC and $5,000 Ether (ETH) the “path of least resistance” after the two assets survived a more than 50% correction through the summer.
“Crypto-assets appear in a revived and refreshed bull market with the 2H benefit of a steep discount from previous highs at the start,” wrote McGlone, referring to the second half of 2021. He said portfolios lacking BTC or ETH exposure are “naked,” as evidenced by the relative underperformance of gold and government bonds:
“Portfolios of some combination of gold and bonds appear increasingly naked without some Bitcoin and Ethereum joining the mix. A macro risk-off decline is a primary threat for the crypto bull market.”
While predictions for six-figure Bitcoin are nothing new, McGlone’s long-term forecast puts BTC near the center of the global financial system. “[W]e believe Bitcoin represents the digital future,” McGlone said after explaining that the dollar has advanced more than 300% against major peers since President Richard Nixon nixed the greenback’s gold peg in 1971. He further explained:
“We foresee a future of Bitcoin, the digital reserve asset, complementing the dollar reserve currency.”
Bitcoin’s most passionate supporters have long argued that the cryptocurrency would mature to become a global reserve asset. Their conviction stems from Bitcoin’s superior monetary policy in an era where central banks have inflated the money supply, contributing to wealth inequality and higher prices for goods, services and assets.
Bitcoin’s value proposition has also been recognized within institutional circles, with JPMorgan Chase and BlackRock arguing that BTC is eroding gold’s market share as a storehold of wealth.
Bitcoin price broke towards $51,000 on Friday as the broader cryptocurrency market rallied to over three-month highs. The total market capitalization of all cryptocurrencies reached $2.4 trillion during Friday’s high compared with a low of around $1.2 trillion in mid-July.