Insights

2021 Bitcoin Price Outlook

SPIRIT Blockchain projects the price of Bitcoin to rise to at least $120,000 within the next 12 months. 

Vancouver | April 16, 2021 – SPIRIT Blockchain LLC (“SPIRIT” or the “Company”) expects the price of Bitcoin to move significantly higher over the next twelves months, eventually reaching $120,000 by the fourth quarter of 2021. Key Bitcoin valuation metrics suggest that the bull market remains well intact, and that bitcoin is currently building a base for the next leg of the rally. SPIRIT is a firm believer in sound money and Bitcoin’s role as a superior store of value. The company therefore holds bitcoin as part of its corporate treasury management. 

SPIRIT uses a number of valuation methods including fundamental ratios, on-chain metrics and cost of production models to value Bitcoin. Among other things, SPIRIT attributes the sustained and healthy bull market to the following factors: 

Bitcoin’s financial infrastructure such as custody and brokerage services has matured notably and now allows institutional investors to enter the space. As a result, insurance companies, asset managers and hedge funds have since emerged as large buyers of bitcoin. SPIRIT believes that going forward, Bitcoin will play an increasingly important role in institutional portfolios in light of its role as an uncorrelated asset that can significantly improve risk-adjusted returns and diversification. 

The increased likelihood of a U.S. Bitcoin exchange-traded fund (ETF) is another bullish underpinning. While there are multiple approaches to investing in Bitcoin, the approval of an ETF may well result in a tidal wave of institutional capital. SPIRIT believes that a potential SEC approval is significantly more likely than in the previous years given that previous SEC concerns regarding custodial risks, audit risks, and market manipulations have since been dispelled or largely mitigated.

In addition, the crypto sector is likely to see several companies going public within the next twelve months, with Coinbase leading the way in the form of a direct listing at the Nasdaq. Coinbase has registered surging sales growth and profitability, indicating that crypto trading has become more mainstream. The IPO candidates’ regulatory filings and transparency will lend additional credence to the sector. 

Lastly, the bitcoin price is about buyers vs. sellers like in any other market. However, Bitcoin miners will only be able to produce a fixed amount, regardless of how high the price rises. At the current price level, the data suggests that miners are building up significant holdings of bitcoin as part of their treasury reserves and are unlikely to face sell pressure in the event of a major price correction. Meanwhile, buyers continue to take bitcoins off exchanges and move them to permanent cold storage, suggesting that they will hold Bitcoin over the long term. Current metrics indicate that long-term holders have gained the upper hand given that 63% of all bitcoin in circulation has not been moved in at least 6 months. 

SPIRIT believes Bitcoin is here to stay. The company considers Bitcoin to be an aspiring global digital store of value and a reserve asset that is increasingly favored over gold. This is why SPIRIT holds bitcoin as part of its corporate treasury, according to SPIRIT’s Investment & Research team headed by Florian Volery and advisor Manuel Trojovsky.

For more information, please contact us at info@spiritblockchain.com

Note: In line with common notation, SPIRIT refers to the technology and network as Bitcoin (uppercase) and to the unit or cryptocurrency as bitcoin (lowercase). 

About SPIRIT Blockchain 

SPIRIT aims to become a leading Blockchain & Digital Asset company focused on streaming, royalties and cryptoassets investments. The firm provides investors with a direct exposure to the sector, without the technical complexity or constraints of purchasing the underlying cryptoassets. SPIRIT’s strategy is based upon Management’s conviction that the Blockchain and Digital Asset ecosystem will register significant growth and outperform traditional asset classes over the medium to long-term. As a result, cryptoassets will become an integral part of diversified portfolios. Additionally, SPIRIT is building the bridge between North America and Europe/Switzerland.