Bitcoin is far below its all-time high. Despite the developments that have transpired over the past few years, the cryptocurrency is still 65% below its all-time high of $20,000, now trading at $7,000.
But according to Kelvin “Spartan Black” Koh — a partner at crypto fund The Spartan Group and a former partner at Goldman Sachs — Bitcoin’s bull case is bigger and better than ever before, saying that investors “[couldn’t] ask for a better setup.”
Koh cited five fundamental factors to back his point.
8 months ago, BTC surged to almost $14K when Libra was announced. Libra is now closer to reality and DCEP is almost live. India, Korea and Germany have approved crypto. QE infinity is here plus BTC halving is <30D away. Yet BTC is half where it was. Can’t ask for a better setup. https://t.co/kcjRsK8neP
— SpartanBlack (@SpartanBlack_1) April 17, 2020
#1: Libra is Close to Seeing a Launch
Revealed yesterday by David Marcus, the co-founder of Libra and the head of Facebook’s blockchain team, and press releases, Libra is moving one step forward to seeing a launch. To do so, it has had to make changes to its plans for governance and its plans for the rollout, but the takeaway is that the project is still on its way.
Koh suggested that as Bitcoin seemingly rallied to $14,000 on the Libra news alone last year, a launch of the project could do even more to boost prices.
#2: DC/EP is Being Rolled Out
As we’ve heard from local media reports and the People’s Bank of China itself, China is finally starting to roll out its national digital currency project after years of development.
Although using the asset to spend it on Bitcoin is likely vehemently banned, analysts expect this to dramatically accelerate the world’s propensity to use digital forms of money, be that a central bank’s digital currency or even Bitcoin.
#3: India, South Korea, Germany, & Other Markets Have Legalized Crypto
Over the past few months, nations like India, South Korea, and Germany — all leading markets for the crypto space — have made rulings and legislation on cryptocurrency and blockchain, showing that it supports innovation as long as it is within certain bounds.
This may accelerate adoption as investors may finally feel they can properly invest in crypto without fear of scrutiny.
#4: Federal Reserve’s “QE Infinity”
Announced last month, the Federal Reserve will purchase any amount of bonds (even if that means an infinite amount) to “support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
The programs include the purchasing of corporate debt, Treasuries, and mortgage-backed securities until the economy normalizes again.
While the word “infinite” was not mentioned in the Federal Reserve’s press package on this news, many economists and analysts have dubbed these measures “QE Infinity” due to the lack of limits/hard caps mentioned by the Fed.
The idea goes that infinite liquidity should benefit a scarce asset like Bitcoin or gold.
#5: Bitcoin’s Halving Is a Month Away
The final point the analyst made was that the Bitcoin block reward halving, which will see the number of coins issued per block fall from 12.5 to 6.25, is now a mere month away.
This will result in an instant 50% inflation shock for the cryptocurrency, which analysts say will boost prices due to simple supply-demand dynamics: lower supply and increased/consistent demand should naturally push a market higher.
Earlier this year, Koh and the team at the fund suggested that the halving alone could be responsible for Bitcoin’s growth to $40,000, double the previous all-time high of $20,000. They said in a to-the-point blog:
Bitcoin’s price will hit $40K in 2020. Reason: we expect a supply crunch post halving.