Analysts at Deutsche Bank Predict that the Price of Bitcoin Will
Rise to $28K
Deutsche Bank
has predicted that the price of bitcoin will increase nearly 40% from the
current level to $28K by the end of the year. The bank’s analysts also warned
that "the crypto free fall could continue."
Deutsche Bank’s Bitcoin Price Prediction
Deutsche Bank
has reportedly predicted that the price of bitcoin will rise to $28,000 by the
end of the year. An analysis was presented by the bank’s Senior Economist and
Market Strategist Marion Laboure and Research Analyst Galina Pozdnyakova,
Bloomberg reported on Wednesday.
Based on
their analysis, bitcoin’s price will rally 38% from the current price of
$20,329 given how closely BTC has been trading with U.S. stocks.
Cryptocurrencies
have been correlated to benchmarks such as the tech-heavy Nasdaq 100 and the
S&P 500, since November. The S&P 500 is down 21% since the beginning of
the year. Deutsche Bank strategists expect the index to recover to January
levels by the end of the year.
Laboure and
Pozdnyakova have compared bitcoin to diamonds, rather than gold, the publication
revealed. They cited the tale of De Beers, a major company in the diamond
industry that was able to change consumer perception about diamonds through
advertising efforts.
"By
marketing an idea rather than a product, they built a solid foundation for the
$72 billion-a-year diamond industry, which they have dominated for the last
eighty years," the analysts said, elaborating:
"What’s
true for diamonds is true for many goods and services, including
bitcoins."
The Deutsche
Bank research analysts also discussed the recent turmoil in the crypto space,
including troubles at some crypto lenders such as Celsius Network.
"Stabilizing
token prices is hard because there are no common valuation models like those
within the public equity system. In addition, the crypto market is highly
fragmented, "they opined, warning:
"The
crypto free fall could continue because of the system’s complexity."
On previous
occasions, Laboure had said she could "potentially" see bitcoin
becoming "the 21st-century digital gold" and that "people have
always sought assets that are not controlled by governments." The
economist added: "Gold has had this role for centuries... Let’s not forget
that gold was also volatile historically."
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