The CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations, Nigel Green, says the Bitcoin price recovery is “Well underway.”
The prediction by Green comes as the powerhouse cryptocurrency finally snaps its longest-ever weekly losing streak.
Following a battle to find support over the weekend, Bitcoin ultimately ended the week at $29,900, which was $450 higher than last Sunday.
He says: “Bitcoin investors have reason to be cheerful after the cryptocurrency has snapped the longest weekly downtrend in its history.
“The price recovery has started, probably much to the chagrin of crypto cynics and Bitcoin bashers. I believe that we’ll soon see a bull run that will lead to a significant bounce in the fourth quarter of the year for the world’s leading digital currency.”
Bitcoin is currently highly correlated to leading global stock markets, such as Wall Street’s S&P500, he continues, “I’m confident that the recent market downturn is close to the bottom and a rally is imminent.”
“One good indicator that the bottom is near is that tracking services reveal that ‘insiders’ are on a buying spree. They’re 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.”
Another key reason, says Green, for Bitcoin to have a strong recovery is that investors are using it as a hedge against red-hot inflation as they look to protect their purchasing power by moving out of cash and into store of value investments.
Bitcoin is regarded as a credible hedge against inflation because of its scarcity – a limited supply of 21 million means that higher demand will push prices up. Also because of its accessibility – as an asset, it has value and is accepted by the market – and its durability, as Bitcoin, will continue to attract more demand over time.
“In addition, investors 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,” notes the CEO.
He goes on to add the rally will be “supported by the growing investment from major institutional investors, who bring with them capital, expertise and reputational pull.”
Plus, affirms Nigel Green, global financial watchdogs are increasingly looking into establishing a regulatory framework because they are taking crypto more and more seriously as a financial asset and a medium of exchange.
“Regulation, which I believe is inevitable, would give more protection and, therefore more confidence, to both retail and institutional investors.”
The Crypto Bloodbath
Bitcoin’s rise has been waylaid in recent months by the US’ Federal Reserve and other central banks turning towards rate-hiking cycles as Americans feel the pressure of stubbornly high inflation.
The recent collapse of the Terra cryptocurrency ecosystem also added further kindling to the burning fire that is the current sentiment towards digital assets and crypto.
Cryptocurrency trading has faced a bloodbath in recent months. According to the Bloomberg Billionaires Index, Coinbase CEO Brian Armstrong’s net worth has decreased from $13.7 billion to $2.2 billion.
This was not only due to the fall in digital asset prices, but also due to the fall in Coinbase shares, the price of which fell by more than 80%, as sentiment tanked.