Bitcoin is on the cusp of restarting its bull-run, as per a new Bloomberg Intelligence (BI) analysis, with a major rebound predicted. As crude oil is likely to enter a bear trend, which might have serious economic consequences, a large amount of money is anticipated to pour into crypto.
According to Bloomberg Intelligence (BI), the value of470 barrels of crude presently represent one Bitcoin, which is comparable to the 2016 exchange situation, when the crude-to-Bitcoin ratio was also at a three-year nadir before the consequent bull-run of Bitcoin in the final stage of 2017 and initial 2018.
According to BI, Bitcoin may create a parallel in the years leading to 2022 if the current bottom in relative Bitcoin price fluctuation is any indication. As per Bloomberg Intelligence commodity strategist Mike McGlone, the current trend significantly benefits Bitcoin over oil in the second half of this year.
“If West Texas Intermediate crude oil reverses from seven-year peaks at the beginning of July, the pre-existing downturn in bond rates is more likely to intensify, with bullish ramifications for gold and Bitcoin as store-of-value assets. The term ‘pre-existing’ has to be defined, given the odds appear to be stacked against crude oil repeating its downward trend after topping in 2008.”
A small catalyst, according to analysts, might cause price reversal when there is a swing in price against a much more fundamental trajectory. Bitcoin has an advantage over crude oil because of its growing adoption and ever-dwindling quantity.
Bitcoin is also reported to be gaining ground against oil as a result of increased digitization and decarbonization. Bitcoin is expected to gain from the central bank’s asset purchase initiative, which may generate inflationary pressure and push individuals to seek for safe-haven assets, according to another study.
The Fed’s accommodating balance sheet approach, as per financial expert John Miller, will underpin asset prices and sustain high liquidity. Only cryptos with significant store of value characteristics, such as Bitcoin, would prosper in this climate. Alexey Veledinskii, product owner of Digitex, also believes that with growing inflation concerns, Bitcoin should stay near $30,000 and appreciate.