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Bloomberg said that all signs currently point to a big bull market for Bitcoin in 2020, and the only question is whether it will break through the all-time high of $20,000. A new report from Bloomberg shows that the company expects Bitcoin (BTC) to retry its all-time highs from 2017 and may even break through to new highs, reaching $28.000.

COVID-19 & Institutional Investors Support Bitcoin

The report shows that Bitcoin, as an asset, has accelerated its maturity under the influence of the COVID-19 epidemic, demonstrating its strength in the face of the sluggish stock market. The report believes that institutional investors, especially Grayscale companies, have increased demand for the Grayscale Bitcoin Trust, consuming approximately 25% of the new supply:

“The ongoing increase in assets under management has consumed approximately 25% of new Bitcoin production so far this year, compared with less than 10% in 2019. Our chart shows the 30-day average of Grayscale Bitcoin Trust’s assets under management The price has risen rapidly and is approaching 340,000 Bitcoin equivalents, which is about 2% of the total supply. About two years ago, this number was only 1%.”

The GBTC/BTC premium is shrinking. Source: Bloomberg

The GBTC/BTC premium is shrinking

Bloomberg found clear signs of GBTC/BTC premium narrowing:

“Despite significant inflows, GBTC’s premium has steadily declined, suggesting that Bitcoin’s supply is gradually leaving the market and maturing. On a 30-day average basis, the trust’s underlying NAV is trading at a 20% premium versus the historical average 39%.”

Bitcoin vs Gold Price Trend Data Source: Bloomberg

Is the BTC price $20.000 or $28.000?

The report states: If Bitcoin wants to increase its value, it must make some new attempts. After that, it will reach the 2017 high of $20.000 and may even break the all-time high of $28.000:

"Last year's high was $14,000. If corrected within the recent range, this will double in 2020. Compared to the future, this is just the beginning."

Correlation between BTC and USDT Source: Bloomberg

According to the report, another major reason for the rise in Bitcoin prices is the rapid issuance of Tether (USDT). In May last year, the market value of USDT reached US$4 billion, which expanded to US$10 billion a year later. The increase in stablecoin issuance indicates greater acceptance of cryptoassets:

“Linking the U.S. dollar to cryptography represents the world’s reserve currency for trading and storing value without intermediaries. With the world currently moving rapidly towards digitization, and throughout history, we have only been able to adopt a solution similar to paper money. method."

With the settlement of Bitcoin’s third halving, 2020 is almost halfway over. It won't take long to test whether Bloomberg's forecast is accurate.