The price of bitcoin might enjoy huge gains in 2021. Major corporates and banking giants are now adopting the flagship crypto and are accepting it as an emerging asset. Bitcoin’s price bounced back to $50K earlier in the week as investors bought the dip that had pulled the crypto down to around $43K in the past week.
Notably, the latest sell-off was blamed on investor’s profit-taking strategy instead of any alteration in fundamental factors. Bitcoin’s fundamental analysis has been improving in recent days amid increasing trading volumes, research, custody offering, and prime brokerage.
Bitcoin’s price is up by about 65% year to date on improving outlook. However, analysts and commentators believe that it is not the end of the current bull run.
Bitcoin May Enjoy Massive Gains After Mass Adoption
Bitcoin’s immunity from economic downturns and various monetary policy adjustments may play a huge role in making it the ideal choice for international trade, based on a 100-page report that was headed by Citi’s Sandy Kaul. Citi analysts said in a report:
“It is immune from both fiscal and monetary policy, avoids the need for cross-border foreign exchange transactions, enables near-instantaneous payments, and eliminates concerns about defaults or cancellations as the coins must be in the payer’s wallet before the transaction is initiated.”
The market prices have the potential to surge in the coming days in case the market participants see signs of bitcoin gaining adoption for international trade. Interestingly, the report also hinted at the importance of institutional investors and mainstream crypto adoption headed by major banks that opposed crypto innovations in the past.
Joyce Chang and Amy Ho, JPMorgan Chase strategists, recently urged clients to allocate 1% of their portfolio to Bitcoin. These strategists said:
“In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio.”
At the time of writing, Bitcoin is hovering above $47,500 having peaked around $50K earlier in the day, according to Coinmarketcap.