According to Bloomberg Intelligence analyst Mike McGlone, bitcoin and ethereum are still in a state of low adoption. But demand will grow, supply will decrease, and prices will rise.
Mike McGlone's tweets
In a post on Twitter, he tweeted.
#Bitcoin and #Ethereum are still in the early adoption phase, with increased demand vs. decreased supply and the associated price impact. Our bias is why it’s complicated – unless there’s something unlikely to reverse the proliferation of emerging technologies, prices should rise over time. pic.twitter.com/SAgqWrfIMV– Mike McGlone (@mikemcglone11) January 29, 2022
“#Bitcoin and #Ethereum are still in the early adoption phase, with increased demand vs. decreased supply and associated price impacts. Our bias is why it’s complicated – unless something is unlikely to reverse the proliferation of emerging technologies, prices should rise over time.”
In fact, this K-line chart shows how the supply of both decreases in the presence of an increase in demand. This phenomenon in economics leads to an obvious result: higher prices.
Bitcoin and ethereum adoption
2021 will undoubtedly be a very important year for bitcoin and ethereum. Bitcoin has been dragged down by a number of phenomena that have greatly increased its spread and visibility, such as
- its presentation on PayPal.
- Tesla’s largest investment.
- It has been adopted as legal tender in El Salvador.
Ether is certainly not lagging behind, quite the opposite. The DeFi industry has consolidated, and the NFT market has exploded, despite competition from other "ethereum killers", most of which use the ethereum blockchain.
Good intentions for bitcoin and ethereum according to Bloomberg According to Bloomberg, bitcoin and ethereum for 2022
According to Bloomberg, bitcoin and ethereum will be a "win-win" starting this year, especially when compared to oil. That's what Bloomberg Intelligence itself shows in a report that begins with the following.
“As the U.S. midterm elections approach, cryptocurrency assets could be of great help to them, especially for inflation-related commodities. Typical demand and supply elasticity, as well as crude oil prices boosted by the risk of war in Ukraine, are powerful catalysts for refreshing a protracted bear market in oil. Bitcoin and ethereum are the opposite. In the early stages of adoption, the first two cryptocurrencies had negative supply elasticities and prices fell in the midst of a bull market. Inflation is the primary issue facing politicians under pressure to deliver, while a large amount of potential U.S. commodity production is constrained by regulation. We expect U.S. policymakers to embrace cryptocurrencies through proper regulation and ETFs for the following reasons: dollar dominance, jobs, votes, significant revenue (taxes) – and most importantly – it will run counter to China’s antipathy. “
In the report, it is confirmed that there are 17,000 cryptocurrencies, but only Bitcoin, Ether and some others such as stablecoins are sustainable. It then reiterates that as Bitcoin and Ether see demand grow and supply shrink, they will also see prices rise.
In particular, Bloomberg Intelligence expressed confidence that bitcoin adoption will grow.“Bitcoin’s path to broader mainstream adoption is likely to be unstoppable, which will have an impact on prices. The launch of U.S. futures exchange-traded funds in 2021 appears to be a first step by regulators, which we believe will lead to ETFs tracking actual cryptocurrencies through broad indices. (……) The rising demand, adoption and depth of bitcoin should leave some volatile options, but will fall.”
The report concludes with some predictions that the large number of cryptocurrencies (currently 17,000, compared to 8,000 in early 2021 and 5,000 in 2020) will not be able to support their price increases, and that the Shiba Inu and Dogecoin spikes indicate some form of purge is coming. All this while the fundamentals of bitcoin point to a bullish scenario.
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