Economic data released last week was worrying, to say the least. Midweek figures revealing a drop in exports from big Asian economies, such as Japan and South Korea, hit equity markets globally, resulting in the S&P 500 and the FTSE 100 both dropping considerably.
From a crypto asset point of view, however, both Bitcoin and altcoins have performed well during this difficult period. Bitcoin has been in a consolidation phase, remaining steady in between $6,000 and $7,000. There has been the odd spike, both to the upside and the downside, but overall, I am happy with the solidity of the price at the moment.
With the Fed carrying out its policy of unlimited quantitative easing, buying assets left, right and center, I think Bitcoin is going to push towards $7,500 in the short term.
Quarterly musings and a look ahead to Q2 for Bitcoin
So what is coming for cryptos in this new quarter? The big event, of course, is the Bitcoin halving and the reduction in block rewards is now just over a month away. The two previous halvings saw massive upward inflections in price, May’s is likely to be no different. Following the halving, I think Bitcoin will reach the lofty heights of $20,000 by the end of 2020 / early 2021. This will precipitate an extended bull run, which could see Bitcoin hit $100,000 by the end of 2021 / early 2022.
There are a number of factors suggesting a price increase. Firstly, the halving of the block reward in May means that miners with less efficient equipment will fall away, leading to a drop off in the hash rate and the Bitcoin ecosystem becoming more efficient. This initial drop in supply should put upward pressure on the price. Combine this with the likelihood of inflation, resulting from QE measures around the world as governments and central banks fight the fallout caused by COVID-19, and the long-term outlook for Bitcoin looks pretty good.
It’s also important to note that Bitcoin hasn’t actually dropped as far as global markets have in this first,…