.Jakarta, CNBC Indonesia - Bitcoin has once again stolen the attention of world market players this year, its price has flown higher than other assets, including gold. In fact, there are "crazy" predictions for the price of bitcoin in the next year, which makes gold look "dime". Launching Refinitiv data Friday (20/11/2020) at 14:17 WIB, bitcoin strengthened 1.75% to US $ 18,258.25 / BTC in today's trading. When viewed this time of year or year-to-date (YtD), this cryptocurrency flies by more than 155%. Compare with gold which "only" shot 23%.
Bitcoin is now around 6.5% of the all-time high cost record of US $ 19,458.19 / BTC which was hit on December 18, 2017.
An increase of more than 155% this year can be said to be impressive, but through technical analysis, Citibank predicts bitcoin will "to the moon" more than 1600% next year. By the end of 2021, bitcoin is predicted to hit US $ 318,000 per coin, crazy! The prediction was leaked to the public via Twitter's social media. In his notes to consumers, the analyst calls Bitcoin '21st century gold'. "Bitcoin's entire existence has been marked by unthinkable performances followed by painful corrections, the kind of patterns that underpin long-term trends," wrote Tom Fitzpatrick, Global Head of CitiFX Technincals Citibank in a note to institutional clients, as quoted by Forbes, Friday (20 / 11/2020). "Based on the three bulls (uptrend) running over the past decade, the current rally in bitcoin prices has the potential to peak in December 2021, indicating a move of up to US $ 318,000 (per coin)."
"Time will tell if Bitcoin finally reaches such highs but previous events suggest the potential for a big move higher in the next 12-24 months." In that note, it was stated that one of the reasons for the increase in bitcoin prices was its reputation as an increasing digital gold. When considered as digital gold, the factors that influence its movement are of course the same as precious metal gold. Monetary and fiscal policies, rising inflation and a weakening of the US dollar are the "fuel" for gold to continue climbing. Bitcoin of course will also enjoy this, because loose monetary policy and flushing of fiscal stimulus will continue until next year. However, the prediction of rising gold in the next year is even less brilliant than bitcoin. Analysts predict gold will reach the level of US $ 3,000, US $ 4,000 and even up to US $ 10,000 / troy ounce, but that is not next year, but in the next few years or in the long term. So that gold will look "nickels" compared to bitcoin.
In addition to its follow-up to gold, seasoned investors, such as Paul Tudor Jones and Stanley Druckenmillier have also started investing in bitcon, which has made cryptocurrency "lovers" even more excited. At CNBC International's "Squak Box" event last May, Jones said bitcoin was "very good speculation", and that there were about 2% bitcoin in his investment portfolio. "More than 1% of my current assets are bitcon, maybe almost 2%, and that looks like the right number for now," said Jones as reported by CNBC International.
For investors in general, Jones's investment in bitcoin is something unusual. But according to Jones, bitcoin is better than cash, such as the United States dollar (US). "If you hold cash, you know the central bank has the goal of depreciating the exchange rate by 2% per year. So basically holding cash equals making your assets for nothing," he said.
Meanwhile, Stanley Druckenmillier sees inflation in the US will continue to rise in the next 5 to 6 years due to monetary stimulus from the US central bank (Federal Reserve / The Fed), and he likes gold and bitcoin as a hedge against the risk of rising inflation. Druckenmillier's statement indicates bitcoin behaves like gold, so many call it digital gold.Meanwhile, according to investment bank JP Morgan, gold and bitcoin investors are different. Bitcoin investors are dominated by millennials, while gold is older. "Two groups show differences in preferences for 'alternative' currencies. The older group chose gold, while the younger group chose bitcoin," said JP Morgan analyst led by Nikolaos Panigirtzoglou in a note quoted by Kitco, Tuesday (18/8/2020) ). The preference for gold and bitcoin as an alternative has an impact on the correlation between the two assets to be more positive. This means that they both move in the same direction, when gold strengthens, bitcoin will also go up. According to JP Morgan, this is because millennials in the US see bitcoin as an 'alternative' money to the US dollar. "The simultaneous flow of capital has caused a change in the correlation pattern between bitcoin and other assets, to be more positive between bitcoin and gold, but also between bitcoin and the dollar as millennials in the US see bitcoin as 'alternative' money to the US dollar," said Panigirtzoglou.
Launching Forbes, Xolali Zigah, founder and chairman of Cash Angel, in May said that so that bitcoin can be called "digital gold" must also have attributes like gold which has been considered a safe haven, except for tangible assets of course. The main attribute, namely scarcity, both gold and bitcoin have a limited supply. Then there are 3 other attributes. First, as a means of payment. Gold and bitcoin can be used as a means of payment, both of which can be exchanged for goods or services.
The second is the unit of account, where these two assets can be broken down into smaller sizes. Gold can be broken down into half an ounce, quarter ounce, or grams. While bitcoin can be divided into 1 satoshi, which is 1 / 100,000,000 bitcoin. Third, as a store of value, which is said to be debated whether bitcoin has it or not. Store of value usually shows assets that will be hunted down during economic turmoil because they have intrinsic value.Zigah said that many investors are skeptical that bitcoin has no intrinsic value because it is an intangible asset. But according to Zigah, intrinsic value does not always have to be tangible, it can also be seen from the security side it provides. He stated that in the next few months or years, it will be known whether bitcoin has really become digital gold or not. Zigah believes bitcoin will show as a store of value asset. It still takes time to prove whether bitcoin is digital gold or not. Reflecting on its movements since its inception, when bitcoin flies high it will trigger a sharp decline in a short time. However, according to CEO of Galaxy Digital, Mike Novogratz, the increase in bitcoin this time is different from previous years. In 2017, for example, when it set the highest all-time record, it collapsed almost 80% a year later. According to Novogratz, at that time bitcoin strengthening was triggered by speculative action from retail investors, while currently institutional investors are starting to enter bitcoin. "You can't buy bitcoin at Citibank or the Bank of America, but their strategists are talking about this. We see institutions starting to buy bitcoin, we see wealthy investors buying this, and overseas institutions are starting to be adopted," said Novogratz as reported by CNBC. International. Novogratz's statement can be confirmed by an analysis released by Citibank.
The CNBC Indonesia Research Team sees the potential for bitcoin strengthening using technical analysis, although it is not as "crazy" as the analysis from Citibank. Using the daily time frame, the CNBC Indonesia Research Team sees bitcoin forming an ascending triangle pattern (red line).
The upper limit of the pattern is at the level of US $ 12,300 / BTC, while the lowest point of the slash is in the range of US $ 950 / BTC. So that the width of the ascending triangle pattern is US $ 11,350 / BTC. In theory, when the upper limit is successfully broken, the price of an asset will shoot up as wide as the ascending triangle pattern. So, after US $ 12,300 / US $ is penetrated, bitcoin has the potential to shoot US $ 11,350 / BTC. This means that the strengthening target is in the range of US $ 23,650 / BTC which has the opportunity to be achieved in the next few months. CNBC INDONESIA RESEARCH TEAM