A top analyst at Bloomberg compares today’s $20k Bitcoin to the previous $5k value as a bottom.
Bitcoin is currently struggling to beat back the bears after a sharp price decline that saw the coin’s value drop from $30k to the low of almost $20k. BTC came just $100 shy of its previous ATH of $20k in 2017. The price has since bumped to a current point of $22,143.
While some like Fidelity’s Jurrien Timmer think Bitcoin is undervalued, the strong assertions by Bloomberg’s Mike McGlone are currently the talk within the crypto community. According to Mike, who is a senior analyst and strategist at Bloomberg, a $20k valuation for Bitcoin is like the $5k value a few years back.
“$20,000 Bitcoin Maybe the New $5,000 – The fundamental case of early days for global Bitcoin adoption vs. diminishing supply may prevail as the price approaches typically too-cold levels.”
Adoption Vs. Diminishing Supply
What Mike means by this is that at $20k, BTC may well have established a bottom. This may have been demonstrated when BTC tried to retest the previous $20k ATH but bumped before it could drop to hit it. Also, there have been claimed that BTC doesn’t fall to previous ATH levels. It’s yet to be seen whether this bearish cycle will be any different.
For one, Bitcoin’s supply has been decreased due to continuous mining. After every four years, bitcoin halving occurs, splitting the mining rewards in half after every four years. The impending halving in 2024 will reduce the per block reward from 6.25 BTC to 3.125 BTC.
As smaller supply is produced over time while demand keeps rising, fewer bitcoins would be available for people is the argument Mike is suggesting that the new bottom could be $20K.
Adoption has also increased as the coin, as well as the entire crypto industry, gets more popular and gained adoption over the years. Bitcoin has been one of the top cryptos that have attained mainstream adoption. This makes a case for Mike’s argument that the price is likely to have bottomed out at a higher level than the previous $5k bottom. The laws of demand and supply seem to play well here.
What’s Next For Bitcoin
Since the beginning of the year, the market has faced a fierce bearish onslaught that has seen most coins lose their value by double-digit percentages. At the moment, many analysts and traders are convinced that crypto winter is already in play. However, no one is quite sure how long it could last, but most expect it to last for months.
In the case of BTC, it tends to spring back after a rough period. It may be bearish for the short-term but remain extremely bullish in the long term.