According to Bloomberg Intelligence analyst Mike McGlone, Bitcoin and Ethereum are still at a low adoption state. But demand will grow, supply will decrease and price will increase.
Mike McGlone’s tweet
He said this in a post on Twitter:
#Bitcoin and #Ethereum remain in early adoption days, with increasing demand vs. declining supply and related price implications. Our bias is why complicate it — unless something unlikely reverses the proliferation of the nascent technology, prices should rise over time. pic.twitter.com/SAgqWrfIMV
— Mike McGlone (@mikemcglone11) January 29, 2022
“#Bitcoin and #Ethereum remain in early adoption days, with increasing demand vs. declining supply and related price implications. Our bias is why complicate it — unless something unlikely reverses the proliferation of the nascent technology, prices should rise over time”.
Indeed, the chart shows how the supply of both is shrinking in the face of a demand that is instead increasing. This phenomenon in economics leads to one clear result: rising prices.
Bitcoin and Ethereum adoption
2021 certainly was a very important year for Bitcoin and Ethereum. Bitcoin was dragged by some phenomena that greatly increased its spread and awareness, such as:
Ethereum has certainly not been lagging behind, quite the contrary. The DeFi sector has consolidated, while the NFT market has exploded, most of which use precisely the Ethereum blockchain, despite competition from other “Ethereum-killers”.
The 2022 of Bitcoin and Ethereum according to Bloomberg
From this year, according to Bloomberg, Bitcoin and Ethereum will emerge as “win-win” especially when compared to oil. This is what Bloomberg Intelligence itself shows in a report that starts like this:
“Crypto assets may have a lot going for them as U.S. midterm elections approach, notably vs. inflation-related commodities. Typical demand and supply elasticity, and crude prices buoyed by the risk of war in Ukraine, are strong catalysts to refresh oil’s enduring bear market. It’s the opposite for Bitcoin and Ethereum. In their early adoption days, supply elasticity is negative for the top two cryptos and prices have dipped within bull markets. Inflation is a top issue facing politicians under pressure to deliver, while plenty of potential U.S. commodity production is limited by regulation. We expect U.S. policymakers will embrace cryptos with proper regulation and ETFs for these reasons: dollar dominance, jobs, votes, lots of revenue (tax) and — most importantly — it’ll run counter to China’s antipathy”.
In the report, it is confirmed that there are 17,000 cryptocurrencies, but only Bitcoin, Ethereum and a few others such as stablecoins are sustainable. It is reiterated then that as Bitcoin and Ethereum see demand grow and supply shrink, they will also see the price grow.
In particular, Bloomberg Intelligence says it is confident that Bitcoin adoption will grow:
“Bitcoin’s path toward greater mainstream adoption may be unstoppable, with implications for prices. The launch of U.S. futures-based exchange traded funds in 2021 appears as a baby step by regulators that we think culminates with ETFs tracking actual cryptos via broad indexes. (…) Rising demand, adoption and depth of Bitcoin should leave few options for volatility but to decline”.
The report concludes with some predictions that the large number of cryptocurrencies (17,000 currently versus 8,000 in early 2021 and 5,000 in 2020) will not support their price increase and the Shiba Inu and Dogecoin pumps indicate that some sort of purge is coming. All this while Bitcoin’s fundamentals point to a bullish scenario.
Source: https://en.cryptonomist.ch/2022/02/04/bloomberg-bitcoin-and-ethereum-win-win/