Sun. Aug 14th, 2022

Weiss Ratings is bullish about the price of Bitcoin over the coming year, expecting the leading cryptocurrency to reach the $70,000 mark by 2022.

Bitcoin Could Embark on a Ferocious Rally

Weiss Ratings outlined some key reasons why investors should be ready for a Bitcoin bull run, with analysts at the company expecting the next rally to be a ferocious one. The analysts expect the price of BTC to reach the $70,000 mark by 2022. Furthermore, the Federal Reserve’s massive money-printing and institutional investments going into the cryptocurrency sector adds to the bullish call.

Analysts Bruce Ng and Juan Villaverde talked about the potential of Bitcoin last week, explaining to investors why they should be bullish despite the current price struggles of the cryptocurrency. In their rankings, Weiss Ratings puts Bitcoin first amongst all the cryptocurrencies.

One of the critical reasons why Ng and Villaverde are bullish about Bitcoin comes from a price prediction that is based on the stock-to-flow analysis (S2F). This popular forecasting model indicates that a ferocious rally is set to take place over the next 12 months or so, the analysts wrote.

They described the S2F model using the common-sense notion that once a commodity becomes scarcer, the value increases. They added that scarcity is measured by the circulating supply of the asset. At the moment, Gold has an S2F of 62. This denotes the number of years of current production that is required to match the global holdings of the asset.

The Future of Bitcoin

Following the recent halving of Bitcoin in May, 6.25 BTC is created every 10 minutes. This means that it would take around 56 years for newly created BTCs to match the current circulating supply. The analysts added that the S2F number of Bitcoin is close to that of Gold, which makes a lot of sense because BTC is fast becoming a major rival to Gold as most people now turn to it as a safe-haven investment.

Ng and Villaverde added that the previous S2F predictions line up amazingly with the actual price performance of Bitcoin. They stated that “Now, based on the history of the halving, current S2F analysis says Bitcoin should reach $70,000 by — sometime around mid-2022 … Even if it turns out to be only half right, you could still triple your money.”

Weiss Rating analysts gave two other reasons, which were the “QE infinity” and institutional money flowing into cryptocurrencies. The coronavirus pandemic has led the U.S Federal Reserve to print $2.9 trillion in new paper cash in less than four months. This equals around $22 million a minute. The analysts added that based on these standards, the action of the Fed is a corruption of money on an industrial scale. They predicted that investors are likely to push their funds into Bitcoin and Gold as a safe haven as they begin to lose confidence in paper money.

Bitcoin entrepreneur and billionaire Mike Novogratz has previously pointed out that central banks printing more money is an excellent situation for Bitcoin.

The third and final factor Ng and Villaverde considered was the rising interest in the cryptocurrency market by institutional investors. For instance, Paul Tudor Jones invested $210 million of his personal money into Bitcoin. Grayscale Investment has also been increasing its BTC reserve into its Grayscale Bitcoin Trust faster than the new coins are mined. Recently, venture capitalist Andreessen Horowitz raised around $500 million to invest in cryptocurrency startups. According to the analysts, the massive institutional-sized money coming into a small market like Bitcoin is set to have explosive effects.

By Dov Herman

Dov is a Blockchain and Forex trading enthusiast, who spends most of his time trading and examining software who are related to cryptocurrencies and forex trading. You can follow on Dov’s reviews and articles here on TrustedBrokerz and across the web.