This article provides an update (as of 17:00 UTC on 6 February 2021) on the current state of the Bitcoin markets, as well on the latest thinking on Bitcoin by influential crypto analysts, investors, traders, and other thought leaders.
Bitcoin’s Price Action
According to data by TradingView, on crypto exchange Bitstamp, Bitcoin traded in the range $36,640 (at 02:19 UTC) – $38,333 (at 13:59 UTC) on Friday (February 5). As for today (February 6), the Bitcoin price finally managed to get above the $40,000 level — at 10:52 UTC — for the first time since January 10 before reaching its intraday high of $40,988 at 16:01 UTC.
According to data by CryptoCompare, currently (as of 16:55 UTC), BTC-USD is trading around $40,589, which means that Bitcoin’s market cap stands roughly at $756 billion. Bitcoin is up 7.28% in the past 24-hour period.
Popular crypto analyst and trader Michaël van de Poppe had this to say about Bitcoin’s latest price action:
Crypto analyst Scott Melker says that today’s breakout means Bitcoin price could be heading toward $63,400:
With regard to price targets for Bitcoin, Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence (BI), Bloomberg’s research arm on the Bloomberg Terminal, said in the February 2021 edition of Bloomberg’s Crypto Outlook report:
“Bitcoin’s price-discovery stage points to the next threshold vs. gold, around 100x an ounce, as its upward trajectory has legs. The benchmark crypto was initially capped at 1x until 2017, then 10x until December as the dichotomy between the Bitcoin haves and have-nots quickly narrows.
“Absent a major technology glitch, old-guard gold allocators are primarily at risk if the crypto becomes a reserve asset and Bitcoin as 1-5% of one’s investable assets becomes increasingly prudent. About $30,000 is Bitcoin’s support level vs. $50,000 initial target resistance. The broader crypto market is more speculative and increasingly subject to Bitcoin.“
What On-Chain Metrics Are Telling Us
According to the on-chain metrics looked at by crypto-focused behavior analytics platform Santiment, Bitcoin whales (i.e. addresses holding at least 1000 BTC) are continuing to accumulate BTC:
Crypto analyst and journalist Joseph Young says that a new all-time high (ATH) is “inevitable” based on on-chain data from South Korean blockchain analytics startup CryptoQuant that shows stablecoin inflows are high, Coinbase Pro outflows are high (which suggests that many OTC deals are taking place), and the current lack of bearish signals from miners (who did a lot of selling last week).
Gold vs Bitcoin
According to data by CryptoCompare, as of 16:55 UTC on February 6, Bitcoin is up 40.09% in the year-to-date (YTD) period.
As for gold, that much older store of value asset, according to data by Kitco, on Friday (February 5), gold closed at $1815.20 per ounce, which means that it is down 4.36% vs USD.
Joe Weisenthal, the executive editor of news for Bloomberg Digital, tweeted yesterday that “gold has been tanking ever since the Georgia runoff election.”
Thomas Lee, Co-Founder, Managing Partner and the Head of Research at independent research boutique Fundstrat Global Advisors, replied that Bitcoin is “winning the hearts and minds of ‘store of value’.”
Legendary American Value Investor Bill Miller
On Friday, Miller Opportunity Trust , a value fund that is overseen by Miller Value Funds, disclosed in a filing with the U.S. Securities and Exchange Commission (SEC) that it “may seek investment exposure to bitcoin indirectly by investing in the Grayscale Bitcoin Trust.”
According to this filing:
“The Fund may seek investment exposure to bitcoin indirectly by investing in the Grayscale Bitcoin Trust, an entity that holds bitcoin… The Fund will not make any additional investments in the Grayscale Bitcoin Trust if, as a result of the investment, its aggregate investment in bitcoin exposure would be more than 15% of its assets at the time of investment.“
In his “4Q 2020 Market Letter” (published on January 5), Miller had this to say about Bitcoin:
“At this writing, it is trading at over $31,000, up more than 50% since the middle of December. It has outperformed all major asset classes over the past 1, 3, 5, and 10 years. Its market capitalization is greater than JP Morgan and greater than Berkshire Hathaway and yet it is still very early in its adoption cycle.
“The Fed is pursuing a policy whose objective is to have investments in cash lose money in real terms for the foreseeable future. Companies such as Square, MassMutual, and MicroStrategy have moved cash into bitcoin rather than have guaranteed losses on cash held on their balance sheet. Paypal and Square alone are estimated to be buying on behalf of their customers all of the 900 new bitcoins mined each day.
“Bitcoin at this stage is best thought of as digital gold yet has many advantages over the yellow metal. If inflation picks up, or even if it doesn’t, and more companies decide to diversify some small portion of their cash balances into bitcoin instead of cash, then the current relative trickle into bitcoin would become a torrent. Warren Buffett famously called bitcoin ‘rat poison’. He may well be right. Bitcoin could be rat poison, and the rat could be cash.“
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.