Deutsche Bank forecasts Bitcoin’s return to $28,000

Bitcoin’s price could rebound to $28,000 by the end of 2022, according to Deutsche Bank strategists. Bloomberg reports this.

In the bank’s view, Marion Labur and Galina Pozdnyakova say the rise will be tied to a rally in the US stock market.

Experts noted that since November cryptocurrencies have grown more correlated with the Nasdaq-100 and the S&P 500 indices. They believe these benchmarks will recover to January levels by year-end, pulling Bitcoin along.

At the time of writing, the price of the leading cryptocurrency had slipped below $20,000 and was testing around $19,000.

Deutsche Bank strategists say the case for Bitcoin as “digital gold” has collapsed. The cryptocurrency has not proven a safe haven amid stock-market declines, with physical gold performing better in this respect.

More likely, Bitcoin resembles diamonds — a “highly speculative asset” relying mainly on marketing, noted Labur and Pozdnyakova. They recalled that in the 1950s the market’s leading player, De Beers, changed consumer attitudes toward gemstones through an advertising campaign.

“By selling an idea, not a product, they created a robust foundation for an industry worth $72 billion a year, which dominated for the last 80 years. What is true for diamonds is true for many goods and services, including Bitcoin,” the experts said.

Experts note some problems that have touched the digital-asset market in recent weeks, including the insolvencies of some hedge funds and crypto-lenders.

They say the crypto-market recovery is hindered by the lack of common valuation models, similar to those in the public equity system.

“Moreover, the crypto market is highly fragmented. The decline could continue because of the system’s complexity,” added the Deutsche Bank strategists.

According to Arcane Research, the downside potential for Bitcoin remains at $10,350.

Follow ForkLog’s Bitcoin news on our Telegram — news, prices and analysis.