Mike McGlone, Senior Commodity Strategist for Bloomberg, said that with institutions demanding protection from inflation and dollar depreciation, historical trends could see BTC/USD 8X from current prices.
#Bitcoin in Transition to Risk-Off Reserve Asset: BI Commodity — Well on its way to becoming a global digital reserve asset, a maturation leap in 2021 may be transitioning Bitcoin toward a risk-off asset, in our view. pic.twitter.com/Ycr1LSqEAJ
— Mike McGlone (@mikemcglone11) March 26, 2021
He said that Bitcoin is gaining a reputation as a reserve asset despite the volatility. He uploaded a chart of the BTC/USD average price and the Bitcoin Liquid Index stating that a potential price peak could be as much as $400,000 taking a cue from past price behavior.
This notion of Bitcoin reducing portfolio risk instead of increasing it is a theme that is being talked about among corporates in 2021. There have been numerous announcement of companies allocating portions of their balance sheet to Bitcoin. According to Bitcoin Treasuries, in 2021, the number of companies holding Bitcoin in their balance sheets has already increased by 45% YTD.
The pioneer of this idea was Microstrategy. The public company since last year third quarter has seen over $52 billion converted to BTC on a cost basis, now worth over $73 billion.
“My mission right now is to fix the balance sheets of the world,” Michael Saylor, CEO of MicroStrategy in an interview with TIMES this week.
Victor Nnadi is an Independent Economics Researcher and a Securities Trader.