• Earlier in June, Bloomberg analysts made a bold Bitcoin price prediction, stating that the cryptocurrency could revisit its all-time high near $20,000.
• The forecast is now receiving further support from a worsening macroeconomic climate.
• Observers believe that safe-haven assets, as well as equities, could rally further into 2020 because of the TINA effect.

It has been close to two months since the day Bloomberg made its boldest Bitcoin prediction.

The financial services firm stated that it expects the cryptocurrency to retest its all-time high levels near $20,000. The analogy took cues from its two superlative bull runs that followed an extended bearish period. Bloomberg noted that Bitcoin would merely repeat its prevailing long-term rallies heading further into 2020.

“After 2014’s 60% decline, by the end of 2016, the crypto matched the 2013 peak. Fast forward four years and the second year after the almost 75% decline in 2018,” Bloomberg Crypto had noted in a monthly report.

“Bitcoin will approach the record high of about $20,000 this year, in our view, if it follows 2016’s trend.”

BTCUSD long-term uptrend on the weekly logarithmic chart. Source: TradingView.com

Entering the third quarter, Bitcoin is already showing signs of breaking out towards the $20K-region. The cryptocurrency broke above a crucial resistance area of $10,000-10,500 earlier this week. It eventually established a year-to-date high at $11,420 (data from Coinbase).

Supportive Catalysts

Bitcoin’s rise towards $11,500 came as people retreated from conceivably safer cash-based and Treasury bonds investments. Earlier this month, the US dollar index slipped to its two-year lows.

Meanwhile, Treasury yields remained near their bottom, with its benchmark 10-year note slipping below 0.6 percent.

The reason why traditional safe-haven assets underperformed is the Federal Reserve’s monetary policy. The US central bank on Wednesday confirmed that it would keep its interest rate near zero and would keep buying securities to aid the US economy through the COVID pandemic-led slowdown.

Fed Chairman Jerome Powell also anticipated that the US Congress would roll-out a new stimulus package atop a $2 trillion one to help American individuals and households.

Bitcoin As “TINA”

The unprecedented money supply increased the fears of inflation among investors. As a result, they moved their capital into the riskier assets, benefiting Bitcoin, Gold, and even US equities. Observers call it the TINA effect–which stands for “There Is No Alternative.”

Wall Street indices rose this week on stimulus hopes. Source: TradingView.com

“The Fed intervention adds a bit of a TINA effect,” Mona Mahajan, the U.S. investment strategist at Allianz Global Investors, told WSJ. “There Is No Alternative to stocks. That’s why you see equities continuing to rally.”

The same setup could help Bitcoin as well. The cryptocurrency, which operates outside the purview of single-party control, now serves as an ideal destination to park movable capital. And many, like Bloomberg analysts, see it closing above $20,000 as long as fears of inflation loom over the global market.

“Bitcoin, which some advocates call ‘digital gold,’ also got a boost on the notion that it’s an alternative investment that should act as a hedge against inflation and provide uncorrelated market returns.”https://t.co/7k4GdBkAWr via @markets

— Joe McCann (@joemccann) July 28, 2020

The cryptocurrency is now trading 52 percent higher on a year-to-date timeframe – more than gold and US indices.