Grayscale analysts compared the current situation …
Grayscale analysts compared the current situation in the bitcoin market with the beginning of 2016
Digital asset management company Grayscale Investments has released a new report in which it noted the similarity of the current structure of the cryptocurrency market to that which was “in early 2016 before the historic bullish rise.”.
Grayscale analysts expect Bitcoin demand to rise alongside inflation in local currencies as investors become increasingly interested in limited supply monetary commodities, one example of which is cryptocurrencies..
The company also pays attention to activity at the blockchain level, which reinforces the indicated point of view, namely, an increase in long-term investments before short-term speculation, while reducing the stock exchange balances of Bitcoin to multi-year lows. In addition, the daily number of active Bitcoin addresses has reached the highest level since the all-time high in 2017..
According to analysts, the easing of monetary policy after the US abandonment of the gold standard has led to the formation of cycles of debt-supported bubbles in financial markets. The US economy is increasingly dependent on quantitative easing, and historically, states have found it difficult to break this dependence, says Grayscale.
The authors acknowledge the continued structural strength of the dollar relative to other currencies, while noting investors’ desire to protect their assets amid “unprecedented monetary and fiscal stimulus measures.” This, they said, is another factor that could spark interest in Bitcoin in the future..
They also mention the asset valuation system of hedge fund manager Paul Tudor Jones, which compares bitcoin to fiat currencies, gold and other financial assets in terms of potential for further growth: “Bitcoin’s high valuation came as a surprise. The overall valuation of bitcoin was about 60% relative to financial assets, but its market capitalization is only 1/1200 of their value. It also corresponds to an estimate of 66% relative to gold as a store of value, but its capitalization is 1/60 “.
“Something about that seemed wrong to me. I think this is the price of bitcoin “, – quotes Grayscale as saying Jones.
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