The chief executive officer of blockchain technology company Blockstream says that leading digital asset Bitcoin (BTC) could see a 5x increase in price by the end of the year.
Adam Back tells his 481,600 Twitter followers that he expects the U.S. Federal Reserve to reverse its tight monetary policies before 2022 expires and create a macro environment conducive to the growth of Bitcoin.
“Everyone has their pet macro-views. My guess: stock market + US election season, moral hazard kicks up, quantitative easing ramps up again, rates drop again, money printer goes into overdrive. So the interest rate overhang falls off, and BTC decorrelates somewhere along the way once DeFi (decentralized finance) flushed.”
On top of a favorable macro backdrop, Back says the approval of the much-awaited spot Bitcoin exchange-traded fund (ETF) could leave many bears on the sidelines.
“My permabull case for BTC/USD [is] $100,000 this year. Plus a US physical Bitcoin ETF chaser (GBTC upgrade + other) would create a nice whipsaw and probably trigger a big uncoupling and positive reflexivity into a blow off top next year.”
Back warns traders against taking leveraged positions, especially now that there’s a lot uncertainty surrounding the DeFi space.
“But what do I know? Just don’t use leverage, and most particularly, not while the DeFi contagion works out. If you don’t have leverage you can just buy and hold and wait so timing matters not. I’m a permabull. So I keep buying as I can afford. And hold. It works long-term.”
Bitcoin is changing hands at $20,051 at time of writing, a 9.94% increase on the day.