Macro Factors Creating ‘Perfect Storm’ to Drive Up Bitcoin Price: Report

Digital asset research firm Delphi Digital says that the macroeconomic landscape is creating the “perfect storm” to ignite Bitcoin price appreciation.

Monetary easing, crypto peaking

In a fresh report cited by Forbes on August 1, the researchers isolate the dovish turn in global central banking policy as the stand-out factor likely to propel Bitcoin’s price skywards:

“First, and arguably most important, sentiment from global central banks took a drastic turn towards more dovish monetary policies. The Fed, ECB, BOJ, PBOC, and many others are now preparing market participants for more rate cuts and additional stimulus measures as they attempt to keep the current economic expansion going.”

Central bankers’ consensus around the need for quantitative easing stems a geopolitical landscape shaped by protracted trade tensions between the United States and China, disappointing GDP growth in Germany, and the anticipated aftershock of a possible no-deal Brexit.

The digital gold narrative

Beyond monetary easing, the increasing risk of fiat currency devaluation represents a longer-term catalyst that is likely to further drive the price of both Bitcoin and physical gold, the report argues. 

As is often discussed, Bitcoin’s scarcity by design and its potential to serve as a store of value in a faltering world economy has earned it the moniker of “digital gold” — a narrative consolidated in Delphi’s new analysis. 

In a discussion of the two assets, the report argues that the digital gold view is ever more relevant amid “extreme monetary policies and rising geopolitical tensions” and that:

“The relative size of Bitcoin’s market value compared to the investible gold market, for example, makes it a tempting opportunity for investors starving for assets with above-average growth potential as well.”

Delphi Digital, in fact, predicts that given its unique non-sovereign properties, the investible Bitcoin market could in future outgrow the current gold market — over $7 trillion as of fall 2018.

As reported just yesterday, a former top-level executive at Goldman Sachs has similarly predicted that Bitcoin’s market cap could hit around $8 trillion in future. 

Shared perspectives

Delphi Digital’s view of Bitcoin’s correlation with macroeconomic factors has been echoed by the likes of Anthony Pompliano, who recently stated that the European Central Bank’s expected dovish turn will be “rocket fuel” for Bitcoin. 

Also this summer,  the head of global fundamental credit strategy at Deutsche Bank remarked that central banks’ dovish policies are positively impacting “alternative” currencies such as bitcoin while hurting investment banks.