Tom Fitzpatrick, global head of Citifxtechnicals products at Citibank Group, predicts that by the end of 2021, the price of Bitcoin will reach a peak of $318,000. Although he admits that his prediction seems unlikely, Fitzpatrick believes that this rise is still the weakest rise in digital currencies compared to other assets such as gold.He also added Bitcoin is all about “unbelievable gatherings and then painful corrections.” Fitzpatrick stated that Bitcoin will experience huge price fluctuations and then finally settle at the expected price.
Fitzpatrick wrote in a report entitled “Bitcoin: 21st Century Gold” that Bitcoin has surged in arguments. He said that the current trajectory of digital gold seems to be similar to gold in the 1970s.
Prior to the implementation of structural adjustments in the early 1970s, gold had spent 50 years trading between US$20 and US$35. However, after the reforms were implemented, the price of gold soared. It recently hit a new all-time high in August and then stabilized below $1,900 per ounce.
According to a report analyzing Fitzpatrick’s papers, this “modern monetary system’s structural changes have triggered a world of fiscal discipline, deficits and inflation.” Therefore, the boss of Citibank believes that after the “Great Financial Crisis” of 2008-2009, Bitcoin stood out and is destined to perform similarly.
As the Covid-19 pandemic continues to plague economies around the world, governments will continue to print more currencies to respond to the crisis. In turn, this will benefit safe-haven assets that perform well during inflation.
Bitcoin is better than gold
Despite this, Fitzpatrick explained that although gold is expected to benefit from a large amount of new funds entering the circulating market, this precious metal has unique limitations and does not seem to affect Bitcoin. Fitzpatrick pointed out in his article:
Gold has restrictions such as storage and non-portability. As far as financial hedging is concerned, it may even be called “yesterday’s news”. Bitcoin is the new gold.
In support of this view, the Citibank boss cited some of the key attributes of Bitcoin, including the “limited supply of digital currency, the ease of cross-border movement, and opaque ownership”. Therefore, Fitzpatrick believes that as a result, more investors will choose Bitcoin over gold.
At the same time, Fitzpatrick predicted that Bitcoin will be subject to more regulatory restrictions in the future. However, unlike other digital currencies such as the Central Bank Digital Currency (CBDC), Bitcoin cannot be confiscated, thus making it a safer asset.
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