Why Bitcoin Could Return To $28,000, But By The End Of 2022
02 July 2022 - 8:00AM
NEWSBTC
Goldman Sachs analysts believe Bitcoin and the crypto market could
see some relief, but only further short and mid-term turmoil. A
recent report from the banking institutions claims the crypto
market has been moving in tandem with the U.S. stock market and
thus it has been affected by the macro-economic environment.
Related Reading | Why Bitcoin Could Collapse Another 50%, Says
Michael “Big Short” Burry The analysis was conducted by Marion
Laboure and Galina Pozdnyakova and it predicts a 30% rally for
Bitcoin by the end of 2022. This is still far from the
cryptocurrency’s previous all-time high of around $69,000. The
report fails to provide reasons that support the bearish theory.
The analysts believe that Bitcoin’s correlation with the stock
market will continue to play against it, and while they predict a
bounce in equities, they believe BTC’s price will lag in terms of
performance. For the stock market, the Goldman Sachs analysis
predicts a resume on its bullish momentum and a potential bounce to
its January 2022 levels. In the meantime, Bitcoin could reach
$28,000 which is over $10,000 less than its January 2022 levels.
Why will BTC underperform the stock market? It is unclear. As usual
for legacy institutions, the analysts dismissed Bitcoin’s
fundamentals and compared it to the diamonds market which they
claimed to bloomed on the back of “marketing”: By marketing an idea
rather than a product, they built a solid foundation for the $72
billion-a-year diamond industry, which they have dominated for the
last eighty years. What’s true for diamonds, is true for many goods
and services, including Bitcoins. The analysts wrote the following
on the factors that contribute to the complexities of measuring the
value in Bitcoin and other cryptocurrencies, and why this could
increase its downside risk: Stabilizing token prices is hard
because there are no common valuation models like those within the
public equity system. In addition, the crypto market is highly
fragmented. The crypto freefall could continue because of the
system’s complexity. The Short-Term Horizon For Bitcoin As NewsBTC
reported, experts more familiar with the crypto industry believe
Bitcoin and other large cryptocurrencies by market cap will keep on
following the stock market. Former CEO of crypto exchange BitMEX
Arthur Hayes expects this correlation to contribute to the decline
in BTC’s price. However, at some point during 2022, the crypto
market will start to decouple from stocks and the U.S. major
equities indexes, the S&P 500 and Nasdaq 100. The bullish
momentum for the digital assets could be supported by a decline in
both the value of legacy markets and a downside trend in terms of
correlation with cryptocurrencies. Related Reading | Ethereum
(ETH) Bends Toward $1,000 As Doubt Fills Crypto Markets As Hayes
explained, that’s when you want to pay attention: For me to hoist
the flag in support of selling fiat and buying crypto in advance of
an NDX meltdown (30% to 50% drawdown), correlations across all time
frames need to trend demonstratively lower.
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