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Analysts: Bitcoin Continues To Be Viewed as a Hedge Tool

Bitcoin continues to solidify its position as a potential tool for hedging one’s wealth, according to most analysts. The world’s number one cryptocurrency by market cap garnered this newfound reputation during the early days of the COVID pandemic, and it doesn’t seem to be letting up anytime soon.

Bitcoin Has a Swelling Reputation

The idea has emerged in recent months that bitcoin is somehow safer and more stable, even, than assets like gold, and far stronger than the U.S. dollar, which is allegedly growing weaker thanks to rising inflation. The cryptocurrency is being viewed as a product that potentially keeps one’s money stable during times of economic strife.

Thus far, the currency is up more than 150 percent in just the last few months alone. This is happening just as analysts believe that the U.S. dollar could fall as much as 20 percent next year when the economy recovers from the pandemic. Jeffrey Halley – a senior market analyst with OANDA Asia Pacific Pte – explained in a recent interview:

Bitcoin seems to be the hedge of choice against the U.S. dollar debasement that is looming, either through more Federal Reserve quantitative easing, higher government debt or a steepening yield curve – or all three.

As the primary cryptocurrency’s reputation has continued to grow, its price has moved up along with it. At the time of writing, bitcoin is trading for just under $18,000, the highest it’s been in three years. Many analysts believe that the currency could potentially hit new highs in 2021. Mike Novogratz, a billionaire investor and former hedge fund manager, is one of them. Speaking with CNBC, Novogratz recently claimed that the asset could strike $65,000 next year.

Other analysts – such as Chris Weston, the head of research at Pepperstone Financial Pty – feel that bitcoin’s ability to help one’s portfolio isn’t playing as big a role as some might think. Rather, he believes this is a good old-fashioned case of FOMO or fear of missing out.

More Legitimacy for the Coin

The fact is that many large-scale companies, such as MicroStrategy and Square, have solidified their positions on bitcoin and bought up huge amounts of the digital asset. This, he says, has worked to legitimize bitcoin somewhat, and now people are more eager than ever to get their fingers on it. He recently commented:

The fact that so many big hitters are publicly declaring their positions is clearly helping. I don’t see this move as a mania or grossly over-loved just yet.

Bitcoin has continued to move up since March, while gold ultimately peaked last August and has since fallen by more than nine percent. Some companies are taking this as a sign that the precious metal is likely to suffer further. Morgan Stanley initially predicted a price of roughly $1,950 for gold in 2021 but has since backtracked to about $1,825.

The post Analysts: Bitcoin Continues To Be Viewed as a Hedge Tool appeared first on Live Bitcoin News.

Source: Live Bitcoin News

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