Jul 1, 2022 at 04:30Deutsche Bank analysts predicted Bitcoin to recover to $28k by December 2022. In particular, they believe it will be possible due to the correlation with the S&P 500, a stock market index tracking the stock performance of 500 large companies on exchanges in the U.S.
The data from CryptoCompare says that during the 2nd quarter of 2022, Bitcoin lost about 58% of its value, its worst quarterly result in a decade. The anti-record stood behind the 3rd quarter of 2011 when BTC lost ~68.1% of its value. It’s the worst quarter for BTC in 10 years. But everything could change in five months.
Deutsche Bank analysts’ research shows an interesting perspective on the medium-term outlook for Bitcoin. They think that the S&P will rebound to its January levels and that BTC’s correlation to the S&P 500 index could result in a 30% increase in value from current levels midway through this year. Thus, Bitcoin will go back to the $28k.
To understand the situation, analysts highlighted the recent collapse of the Terra ecosystem and Celsius and their impact on markets as compounding factors. Thus, in their view, the recovery of the cryptocurrency market is not so clear-cut.
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“Stabilizing token prices is hard because there are no common valuation models like those within the public equity system. In addition, the crypto market is highly fragmented. The crypto freefall could continue because of the system’s complexity,” they said.
Meanwhile, some companies do not believe in Bitcoin’s resurgence. Recently Canadian investment company Cypherpunk Holdings sold all of its Bitcoin and Ethereum to avoid current market risks. Given researchers’ predictions about the growth of bitcoin, whether their decision was the right one, time will tell.
At the time of writing, Bitcoin has fallen below $20k to $19,291. On a weekly scale, that’s -9.4%.
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