Bloomberg’s 2020 Commodity Report has labelled Bitcoin as being a hedge to inflation alongside comparisons to gold.
Gold and Bitcoin have been discussed in the same breath over the past decade despite criticism from multinational banks that claim Bitcoin is based on nothing and has no intrinsic value.
However, as seen by the recent rally in the price of both assets, it seems as though the likes of Goldman Sachs are actually incorrect in their predictions.
The Bloomberg report states: “Among the few assets up in this tumultuous year, gold and Bitcoin are building foundations for further price appreciation, in our view. The metal and the crypto remain our top candidates to advance in 2020, with added rally fuel from Covid-19.”
It continues: “Bitcoin is in a similar [to Gold] consolidation between $9,000-$10,000. We view the benchmark crypto as a resting bull that likely needs something to change significantly in its 10-or-so-year history to not just resume doing what it was doing: appreciating. If the stock market rolls over, gold and Bitcoin should gain buoyancy.”
Several analysts have predicted a cryptocurrency bull market later in 2020 as the reduction in supply from the recent halving begins to take effect.
At the time of writing Bitcoin is trading at $9,675 following numerous attempts at breaking out above the psychological level of $10,000.
A breakout above $10,500 on significant volume would indicate a clear change in behaviour with upside targets emerging at $11,300 and $13,800.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.