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Sky-high Prediction Resurfaces! Citibank Executive: Bitcoin to Reach $318,000 by the End of 2021

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Sky-high Prediction Resurfaces! Citibank Executive: Bitcoin to Reach $318,000 by the End of 2021

Traditional financial institutions such as Fidelity Investments and JPMorgan have been acknowledging the value of cryptocurrencies this year. A recent report from Citibank also expressed optimism about the future prospects of Bitcoin. The managing director believes that Bitcoin is like the gold of the 21st century and has made a bold prediction of $318,000.

The 1970 Gold Bull Market

This report titled "Bitcoin: The New Gold of the 21st Century" was written by Citigroup Managing Director Thomas Fitzpatrick for institutional clients, drawing parallels between the 1970 gold bull market and Bitcoin.

The golden era began in July 1944 when most nations signed the Bretton Woods Agreements, establishing a post-World War II international monetary system centered around the U.S. dollar. This accord not only solidified the dollar's dominance but also led to a continuous rise in the price of gold as a reserve asset.

In the relatively free currency market, the price of gold surged significantly over the next 50 years, while the U.S. dollar, facing multiple crises in the 1960s and 70s, continued to depreciate, ultimately leading to the complete collapse of the Bretton Woods system in 1973.

It is inflation and dollar devaluation that prompted Fitzpatrick to compare Bitcoin with gold. The report states:

Bitcoin emerged after the 2008 financial crisis, alongside zero interest rates and changing monetary systems. Its first bull market occurred between 2011 and 2013, during which it surged 555 times. The pandemic crisis has prompted governments to enact similar measures, pushing the market into an environment reminiscent of the 1970s gold bull market. Countries have also indicated their willingness to implement fiscal measures such as printing money for relief until GDP and employment conditions improve.

Bitcoin Ultimate Price Target

Fitzpatrick, based on technical analysis in the report, made price predictions for Bitcoin based on its upward channel, indicating that Bitcoin could reach an astronomical $318,000 by December 2021. Fitzpatrick stated:

Based on bull and bear cycles since 2011 and the upward channel since 2013, Bitcoin could grow 102 times from its low of $3,200 in 2018 by December 2021. The price behavior over the past 7 years has been more symmetrical, forming a very clear channel, similar to the time frame of the previous peak in 2017.

(Source: @classicmacro)

Consensus in Various Sectors

Twitter analyst @classicmacro shared the report on social media, noting Fitzpatrick's prior price predictions for gold and silver in July. In an unfavorable economic trend, he forecasted gold prices to range between $4,000 and $8,000 per ounce and silver to return to its 2011 historical high of $50.

This aligns with the viewpoint of "Rich Dad Poor Dad" author Robert Kiyosaki, who recently emphasized on Twitter:

The dollar is dying. Silver is an affordable investment for everyone. When the dollar crashes, it's not about how much value is left, it's about how much gold, silver, or Bitcoin you hold.

Furthermore, Fitzpatrick's theory resonates with Wall Street legend investor Paul Tudor Jones, who has been a vocal supporter of Bitcoin this year, emphasizing its inflation resistance and drawing parallels between gold's post-1973 trend and Bitcoin's post-2016 trend.

In fact, Citibank's 2016 research report pointed out that cryptocurrencies like Bitcoin should not be seen as a threat to traditional financial institutions; instead, an open network could enhance current financial services. Binance CEO Changpeng Zhao, known for his bullish stance on Bitcoin, also shared Citibank's bullish report on Twitter.

Bitcoin's strong performance this year has attracted significant attention, with prices nearing historical highs, causing excitement in the crypto community. Many extravagant price predictions have emerged, and while Bitcoin's volatility has decreased, its fluctuations remain higher than traditional assets. Investors should be cautious and only invest funds they can afford to lose.