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Bitcoin bull and Morgan Creek Digital Assets co-founder Anthony Pompliano is mapping out why he believes BTC could reach $225,000 in just over a year.
In his latest letter to investors, Pompliano unveils the macro factors that may serve as tailwinds for the next Bitcoin bull market.
“The Federal Reserve has cut interest rates to 0%. They plan to keep us in a zero-rate environment for the foreseeable future. Multiple stimulus packages in 2020 now total more than $3 trillion in QE. We have another $2 trillion on the way…
The combination of the Fed’s asset price manipulation and inflation fears has driven gold and Bitcoin to drastically outperform equities and other commodities.”
The Bitcoin advocate also highlights that Wall Street has “woken up to the Bitcoin trade,” which Pompliano says has increased demand for BTC.
“We are also seeing a new trend emerge where corporations are using Bitcoin as a reserve asset for part or majority of their treasury. It started with publicly traded digital asset focused firms like Galaxy Digital and others.
Then we saw MicroStrategy ($1.2B+ market cap on NASDAQ) put 85% of their $500M balance sheet ($425M) into Bitcoin. And most recently, financial technology company Square announced that it had purchased about $50M of Bitcoin for their balance sheet (approximately 1% of assets).”
As the demand outlook for BTC remains strong, says Pompliano, he shifts his focus to the supply side of the equation.
He refers to the most recent Bitcoin halving, which reduced the number of new BTC entering circulation from 1,800 to 900 per day.
“Historically, these supply shocks have led to significant price increases of 20X+ in the following 18 months post-halving.”
In addition to the increasing demand and decreasing BTC supply, Pompliano highlights a key factor that he says solidifies the bullish argument for Bitcoin – the fact that more than 60% of all mined BTC has not switched hands in more than a year.
Pompliano says this shows investors are refusing to sell despite several major moves to the downside in 2020.
With his investment thesis in place, Pompliano predicts that Bitcoin could touch $225,000 by the end of 2021.
“Many investors will look at the historical price increase of the digital asset and believe they ‘missed it.’ That couldn’t be further from the truth in my opinion. I believe we are at the start of another boom cycle in Bitcoin, which is likely to drive us 10-20x higher in the 15-month window.”
In other trending Bitcoin News today:
‘Still So Early’ – 7% Of Americans Have Bought Bitcoin, Study Finds
According to new data from Statista, only 7% of Americans have previously used Bitcoin (BTC).
This means current investors in BTC are still in an early stage of growth. Dan Tapiero, the co-founder of 10T Holdings, said Bitcoin is still at the “birth” phase of a new asset class. He wrote:
“It’s still so early for Bitcoin. Still at the birth of a new global asset class.”
In the longer term, Bitcoin has significant growth potential to evolve into an established store of value, like gold.
If so, investors anticipate its valuation to increase exponentially over the next decade.
Currently, the majority of the demand for Bitcoin comes from investors that perceive BTC as gold 2.0. Investors believe BTC would eventually establish itself as a safe-haven asset.
Consequently, institutional investors have heavily accumulated BTC in recent months.
MicroStrategy and Stone Ridge, for instance, purchased $425 million and $110 million worth of Bitcoin, respectively.
But if the retail demand for Bitcoin picks up in tandem across major regions, it could cause BTC to grow exponentially.
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DISCLAIMER: This is NOT financial advice. The views and opinions expressed in this video are just opinions, nothing more. Trading is very risky, especially when trading with leverage. Seek financial advice from a professional and trade at your own risk because I am not responsible for any investment decisions that you choose to make.