• A report from Bloomberg states that Bitcoin is facing a massive bull run and, along with gold, will benefit most from the ongoing corona crisis.
• The Bitcoin market has matured considerably in recent months, so Bitcoin can become the new “digital gold”.

After yesterday’s pump, where the Bitcoin price climbed from just under $7,100 to meanwhile $7,700, experts are discussing the available fundamental data. According to a new Bloomberg report, Bitcoin is facing a massive bull run, which could be similar in scale to that of 2017, when Bitcoin reached its all-time high of more than $20,000.

Strong fundamentals suggest a bull run is imminent

The report argues that Bitcoin can quickly gain momentum if the stock market also rises. Although there is no consensus on whether and how Bitcoin correlates with the stock market, the price of Bitcoin has often risen when traditional financial markets have performed well. According to Bloomberg, Gold and Bitcoin will benefit most from the ongoing corona crisis:

Bitcoin and gold also stand to be primary beneficiaries of the unprecedented monetary stimulus that’s accompanied by a mean-reverting stock market. The macroeconomic effects of the coronavirus accelerate Bitcoin’s process of gaining value relative to other cryptos.

Since the Genesis block of Bitcoin, Bitcoin and Gold currently show the strongest correlation ever, as the following chart shows. Bloomberg states that this year will confirm Bitcoin’s transition from a “high-risk speculative asset to the digital version of gold. According to Bloomberg, Bitcoin will pass the test run as a “quasi-currency” like gold.

In 2015, decreasing volatility marked the beginning of a new bull market. According to Bloomberg, a similar development is currently visible, so that volatility will continue to decrease in the coming weeks and months. A continued rise in open interest in futures also points to a bull run:

Increasing futures open interest, declining volatility and relative outperformance despite the stock-market shakeout indicates Bitcoin is maturing from a speculative crypto asset toward a digital version of gold.

In a direct comparison in the 1-year chart, Bitcoin shows a better performance than the S&P500, the most important stock index of the United States of America. Bitcoin rose by more than 40%, whereas the S&P500 fell by almost 15%. Bitcoin is currently still keeping the increasing futures volume in check. However, the CME Bitcoin futures contracts rose by about 120 % year-on-year in Q1, indicating that the market is maturing further.

Bitcoin has recovered from the lows of a year ago. The launch of listed options, such as CME or Bakkt, also points to a growing adaptation into the mainstream. It is also interesting to note that Bloomberg sees Bitcoin halving as another catalyst for the Bitcoin price. So far there is no consensus among experts whether the halving is already priced in. Other on-chain metrics, such as an increasing number of Bitcoin addresses, also paint a bullish scenario.

Coronavirus supports adaptation and further development of Bitcoin

According to Bloomberg, the corona virus could lead to further adaptation of Bitcoin by the traditional financial system and to a central bank-based digital currency. Overall, the current situation will continue to drive the development of the blockchain industry. The FED (Federal Reserve of America) must be more open to new innovative payment solutions in the future, Bloomberg said:

The Fed may need to be more open to regulated private money if alternatives such as bitcoin come through the coronavirus crisis stronger than before. Wholesale digital tokens based on blockchain — like JPMorgan’s proposed JPM Coin — could transform interbank payments in 2020.

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