The price of bitcoin (BTC) should see a âsignificant bounceâ during the fourth quarter of this year, as investors move back into riskier assets, according to Nigel Green, the founder and CEO of asset manager deVere Group.
With bitcoin snapping its longest-ever weekly losing streak over the weekend, âprice recovery has started⊠[and] weâll soon see a bull run that will lead to a significant bounce in the fourth quarter of the year,â Green predicted in a statement.
Bitcoin languishes in price through first half of 2022
He shied away from putting a price on his forecast after an earlier prediction targeting BTC at $50,000 by end of March fell apart.
SponsoredBitcoin rose above $31,500 on Monday, up more than 6% in 24 hours. During the preceding seven days, the price limped up 1.5% to end a weekly losing streak that had lasted for two and a half months. BTC has tanked almost 40% from $48,000 in late March.
At the time of press, Bitcoin was trading at $31,300, according to CoinGecko. Bitcoin has seen wild swings since hitting a record high of $69,000 on Nov. 10 due to concerns over crypto regulation as well as the global economic outlook. The recent collapse of LUNA added salt to injury.
Flight to riskier assets
Nigel Green, the deVere founder, believes the bottom might be in, and that regulation, though loathed, âwould give [investors] more protection and more confidence.â
âBitcoin is currently highly correlated to leading global stock markets, such as Wall Streetâs S&P 500, and Iâm confident that the recent market downturn is close to the bottom and a rally is imminent,â he said, adding:
âOne good indicator that the bottom is near is that tracking services reveal that âinsidersâ are on a buying spree. Theyâre taking advantage of reasonable valuations to top-up stakes in quality companies in order to create and grow wealth in the longer term. Bitcoin will benefit from a stock market rally as investors move back into riskier assets.â
Devere Group is an independent financial advisory firm with offices throughout the world. Headquartered in Dubai, UAE, the company has over $10 billion in assets under management.
Green touted bitcoinâs inflation-hedging characteristics as another key reason for the expected âstrong recoveryâ. The top crypto asset has often been considered a safe haven because of its scarcity â a limited supply of 21 million coins, which proponents say âmeans that higher demand will push prices up.â
âInvestors are increasingly seeing bitcoin as an alternative to the dollar. The U.S. government started feverishly adding digital dollars to its economy during the pandemic, diluting its value, but adding to the long-term prospects of bitcoin,â he said.
Institutional investors will also be a major driver for sustaining the price push, added the CEO.
Greenâs comments echo the recent report by American investment bank JPMorgan Chase & Co, which said that BTC was trading at a discount of up to 30%. The bank maintained that bitcoinâs fair value is $38,000, based on its volatility ratio to gold.
