Is This a Breakout Year for Bitcoin?
According to the Chief Executive Officer of Devere Group, 2020 will be a breakout year for Bitcoin. Amid the political and financial uncertainty, coupled with the Federal Reserve’s new inflation policy. Nigel Green predicts that investors will run to the safety of assets not tied to any specific country, such as Bitcoin.
Nigel Green established the Devere Group in 2002. Today, it boasts of being one of the world’s leading financial advisors. The company currently has over $10 billion under advice and reports having 80,000 clients worldwide. Last week, Mr. Green suggested that the combination of a weak U.S. currency and the upcoming presidential election will drive Bitcoin’s growth for the remainder of 2020. At the same time, he warned against stock market investing due to the Feds policy shift on inflation.
Bitcoin is Performing Well
Bitcoins price has risen almost 70 percent YTD. The cryptocurrency is one of the best-performing assets of the year. Green went on to say, “Expect the leading cryptocurrency to be further powered for the remaining months of 2020, with the price-drivers being the weak U.S. dollar and the presidential election. When this article was written, the price of Bitcoin stands at $11,695, up from a little over $11,000 five days ago.
Regardless of the situation, a presidential election in the United States is always a time of uncertainty. The upcoming election is being looked at by many as particularly important. Regardless of who wins, Republican incumbent Donald Trump, or Democratic challenger Joe Biden, they will preside over the country as the world adjusts economically following the global impact of COVID-19. Green suggests, “With a heightening of uncertainty, the investment community will seek safe-haven assets, especially those that are not linked to any particular economy, assets such as Bitcoin and gold.”
Dollar Stands to Lose – Regardless
Analysts are predicting a bearish outlook for the U.S. currency. As election day draws ever closer, analysts are predicting that the dollar will continue to weaken, while on the other hand, Bitcoin will strengthen. Although the polls at the moment show Biden with a lead over the incumbent, analyst Dan Popescu suggests the dollar stands to lose whatever the outcome of the election.
Nigel Green sees Bitcoin realizing its reputation for being a form of “digital gold.” Up until this time, gold has been seen as the ultimate safe-haven asset. Bitcoin shares key characteristics with the yellow metal. Bitcoin is scarce and a store of value. Bitcoin has the potential of displacing gold from its long-held top spot as a “go-to” asset. Digital currencies, including Bitcoin, are decentralized, secure, and non-sovereign. As such, digital currencies will become increasingly attractive to investors. Bitcoin offers a hedge against the turbulence so often seen in conventional markets.
Bitcoin Cannot Just Be Printed
The Federal Reserve recently announced a significant shift in policy in an attempt to push up inflation. This policy shift will push many investors to pile into equities. Noting a lack-of-balance in the stock markets, Green suggested that this will only add more fuel to global equities, equities which are already on fire. Green said, “Holding bonds and cash in a market such as this will not provide the returns sought by investors.”
The announcement made by the Fed did not come as a surprise. Some companies have already converted cash reserves to Bitcoin as a hedge against inflation. One billion-dollar public company, Microstrategy, moved a quarter of a million dollars of its reserves into Bitcoin. The Fed’s new policy is also expected to boost Bitcoin prices, with some predicting the crypto could go past $500K.