Delphi Digital, a digital asset research firm, stated that the macroeconomic landscape is developing a ‘perfect storm’ to ignite Bitcoin to rise. On August 1, Forbes cited in a fresh report that the dovish turn in global central banking policy is a significant factor that may propel BTC higher.
The sentiments from global central banks like PBOC, BOJ, the Fed, and ECB have taken a drastic turn towards dovish monetary policies. These banks are now preparing market participants for increased rate cuts and extra stimulus measures as they try to sustain the current economic expansion.
Reports show that central banks’ consensus focusing on the need for quantitative easing stems from a geopolitical landscape that is shaped primarily by protracted several factors. These include the US-China trade wars, anticipation for a massive aftershock of a possible Brexit no-deal, and dismal GDP growth in Germany.
The Digital Gold Theory
Apart from monetary easing, the risk of fiat currency devaluation represents a long-term catalyst that may further pump the price of physical gold and Bitcoin. As it is frequently discussed, Bitcoin’s scarcity by design and its potential to serve as a dependable store of value during a financial crisis has earned it the moniker of ‘digital gold.’ This narrative seems to have got consolidation in Delphi’s new analysis.
The report further stated that the digital gold view is quite relevant amid rising geopolitical tensions and extreme monetary policies. The report adds:
“The relative size of Bitcoin’s market value compared to the investible gold market, for example, makes it a tempting opportunity for investors starving for assets with above-average growth potential as well.”
Delphi Digital predicts that the investible Bitcoin market may outgrow the current gold market due to its unique non-sovereign properties. As reported on August 1, a high-ranking ex- Goldman Sachs executive similarly believes that Bitcoin’s market cap may reach $8 trillion in the future.
Delphi Digital’s opinion of Bitcoin’s correlation with macroeconomic factors has received support from the likes of Anthony Pompliano. He recently said that the European Central Bank’s expected dovish turn will most likely become “rocket fuel” for Bitcoin.
Furthermore, Deutsche Bank’s head of global fundamental credit strategy said this summer that the central banks’ dovish policies are constantly and positively impacting ‘alternative’ currencies. The currencies in this context include bitcoin. On the other hand, these policies are severely hurting investment banks.