Bitcoin on course for longest streak of monthly gains since 2021

by James · April 30, 2023

(Bloomberg) — Bitcoin is set to rise for a fourth month in a row after achieving a gain in April, its longest such stretch since a six-month advance through March 2021.

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The token gained as much as 2.5% on Sunday and was trading at around $29,700 as of 13:55 in New York. Smaller digital assets such as Ether, Binance Coin and Cardano also advanced.

Over the past decade, four-month winning runs in Bitcoin heralded an average increase of 260% over the following year, data compiled by Bloomberg show. A jump of that magnitude would take the biggest digital asset to a record $105,000 from the $30,000 zone where its 80% decline in 2023 from last year’s punishing crypto rout has somewhat stalled.

Bitcoin has changed narrative garb like a chameleon during its revival, drawing support from Federal Reserve bets on looser monetary policy, the perceived blow to fiat currency from the US banking crisis and a planned reduction in the supply of new tokens – a so – called halving — due next year.

Read more: What is Bitcoin ‘halving’? Does it push up the price?: QuickTake

“The biggest thing for crypto is that it’s a lightning rod for liquidity,” Christopher Forbes, head of CMC Invest Singapore, said on Bloomberg Television. “And as liquidity comes back into the market, and it is and we’re seeing it, I think crypto will continue to trade well.”

In recent days, Standard Chartered Bank, BCA Research and Bloomberg Intelligence have all flagged possible paths to at least $100,000 for Bitcoin.

‘Bad’ asset

“The recent crisis in the banking sector has helped re-establish Bitcoin’s core use as a decentralized, trustless and scarce digital resource,” Geoff Kendrick, head of crypto and EM FX West research at Standard Chartered, wrote in a note.

BCA Assistant Vice President Juan Correa-Ossa said it is possible in the long term for Bitcoin to partially usurp gold as a store of value in a digitizing world. If the token approached 25% of the market value of the yellow metal, it would put Bitcoin’s price at $160,000, Correa-Ossa wrote in a note.

Bloomberg Intelligence’s Jamie Douglas Coutts said that if 1% of the global bond market capitalization moved against Bitcoin, it would take the price to $185,000.

America’s breakdown

None of the analysts say that such trajectories are inevitable, but the fact that they are being evaluated shows the changed mood compared to 2022, when digital assets crashed and the FTX exchange led to a wave of explosions.

Bitcoin and the broader crypto world remain exposed to a number of risks, not least the crackdown on the sector in the US. A nearer-term threat is if traders reduce expectations for friendlier Fed policy, according to BCA’s Correa-Ossa.

The various cross-currents, amid a period of pronounced economic uncertainty, make the outlook for real and virtual assets difficult to analyze. Bitcoin is still around $40,000 below its 2021 all-time high of nearly $69,000.

“Crypto markets also have cycles, only these in the past have been mainly driven by crypto-specific factors,” wrote Noelle Acheson, author of the “Crypto Is Macro Now” newsletter. “Not anymore – now the crypto market has multiple drivers, making the narratives more complex while opening up the market to new investment cohorts.”

–With assistance from Sidhartha Shukla.