One trader recently cited a simple supply-demand dynamic to back his point.
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How Bitcoin Could Hit $20,000 “Quickly This Year”: Analyst
Bitcoin trader Theta Seek recently shared that according to his analysis, using data from Chainalysis, specific BTC miners have been “silently accumulating coins over the past six months.”
The data below shows this, with it indicating that the wallet address of F2Pool, a leading mining pool, has started to send fewer coins that it has mined. This is decisively different from the trend all throughout 2018 to late-2019, which saw the pool sell many more coins that it took in.
Theta expects this trend to continue, saying that they believe miners will “continue to do so until well after the halving,” which could result in prices rapidly breaching the $20,000 all-time high “quickly this year from the supply shock.”
As an important note, some have suggested that miners accumulating coins may actually be a bearish sign as opposed to bullish.
According to Charlie Morris, the founder of ByteTree, a crypto analytics and data company, miners hoarding Bitcoin has “historically coincided with negative returns and reflects a weaker market bid” because “they want to protect the market which is too soft to sell into.”
Morris backed up this assertion with this linked chart, which shows that whenever miners sell less than they mine, Bitcoin returns have been poor, with these periods actually accounting for much of the crypto’s losses.
Central Banks Could Play a Role
As hinted at, it isn’t only Theta that sees such a strong rally playing out by year-end.
Speaking to CNBC last week, Mike Novogratz — CEO of Galaxy Digital and a former partner at Goldman Sachs — said that he remains certain Bitcoin will pass $12,000 in October, then eclipse its previous all-time high of $20,000 by the end of the year. He put so much faith in this prediction that he quipped:
“This is the year of Bitcoin and if it doesn’t go up now by the end of the year, I might just hang my spurs.”
Although Novogratz is also bullish on how the Bitcoin halving could boost the supply-demand dynamic in favor of bulls, he mainly believes in the $20,000 prediction due to two factors:
He said anecdotally, he’s been seeing increasing adoption from institutional players, specifically pointing towards high-net worth individuals and hedge funds as incoming investors in the Bitcoin space. This was corroborated by news of Fidelity Investments seeing “pipeline growth” in its crypto services division.
With governments and central banks kicking into overdrive to combat the economic and monetary implications of the coronavirus outbreak and the resulting recession, Novogratz said that he’s convinced “hard assets (Bitcoin and gold) look better” than traditional investments.
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