Deutsche Bank has predicted that the price of bitcoin will increase nearly 40% from the current level to $28K by the end of the year. The bank’s analysts also warned that “the crypto free fall could continue.”
Deutsche Bank has reportedly predicted that the price of bitcoin will rise to $28,000 by year-end, Bloomberg reported Wednesday, citing an analysis by the bank’s senior economist and market strategist Marion Laboure and research analyst Galina Pozdnyakova.
Based on their analysis, bitcoin’s price will rally 38% from the current price of $20,329 given how closely BTC has been trading with U.S. stocks.
They noted that cryptocurrencies have been correlated to benchmarks like the tech-heavy Nasdaq 100 and the S&P 500 since November. The S&P 500 is down 21% since the beginning of the year. The Deutsche Bank strategists expect the index to recover to January levels by the end of the year.
Laboure and Pozdnyakova liken bitcoin to diamonds, rather than gold, the publication conveyed. They referenced the tale of De Beers, a major company in the diamond industry that was able to change consumer perception about diamonds through advertising efforts.
“By marketing an idea rather than a product, they built a solid foundation for the $72 billion-a-year diamond industry, which they have dominated for the last eighty years,” the analysts detailed, elaborating:
What’s true for diamonds is true for many goods and services, including bitcoins.
The Deutsche Bank research analysts also discussed recent turmoil in the crypto space, including troubles at some crypto lenders such as Celsius Network.
“Stabilizing token prices is hard because there are no common valuation models like those within the public equity system. In addition, the crypto market is highly fragmented,” they opined, warning:
The crypto free fall could continue because of the system’s complexity.
Laboure previously said she could “potentially” see bitcoin becoming “the 21st-century digital gold,” emphasizing that “People have always sought assets that were not controlled by governments.” The economist noted: “Gold has had this role for centuries … Let’s not forget that gold was also volatile historically.”
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