Citibank analyst Tom Fitzpatrick believes that the bitcoin market now resembles the gold market in the 1970s.
Dollar inflation in the 70s led to increased demand for gold. In 1971, US President Richard Nixon introduced a series of reforms, abandoning the peg of the dollar to gold and the Bretton woods system. Over the next 50 years, gold showed steady growth.
According to Fitzpatrick, the high inflation of the dollar recently gives grounds for comparing bitcoin with gold. In his new report "Bitcoin: Gold of the XXI century", he writes: "The movement of bitcoin occurred as a result of the Great financial crisis of 2008, when there were new changes in the monetary regime and we fell to zero interest rates."
Fitzpatrick notes that the first bull cycle in the bitcoin market occurred in 2011-2013. As a result, the price increased by 555 times. Currently, financial incentives against the backdrop of the coronavirus pandemic are creating conditions similar to the 1970s, he says.
The analyst also provides a graph suggesting goals for bitcoin above $300,000 by the end of 2021. The four-year bull cycle after 2011 and the ascending channel since 2013, in his opinion, draw a growth of 102 times from the 2018 lows of $3,200.
"Price movements have become much more symmetrical over the past seven years, forming a well-defined channel that allows you to predict an upward movement in a segment similar to the last rally in 2017," he writes.
In another report, Fitzpatrick also predicts a rise in gold to $4 000 – 8 000 expecting an imminent economic crisis. In the past, the analyst has repeatedly warned about the impending collapse of the stock market and predicted the growth of gold against this background.