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Blockchain strategist and former crypto market analyst at Bloomberg Intelligence, Jamie Coutts, shared his predictions on Bitcoin‘s price movements and the broader cryptocurrency market. Coutts conducts an in-depth analysis of Bitcoin’s fundamentals and establishes historical parallels between today’s crypto currency market and the US stock market at the beginning of the 20th century.
Components of Bitcoin’s Rise
Coutts addressed the common perception that Bitcoin’s 150% price increase last year was solely due to positioning before the launch of a spot ETF. He suggested looking at various components of Bitcoin network activity to measure its fundamentals. According to the analyst, a special index including various network adoption measures is at an all-time high, yet Bitcoin’s price remains below 40% of its peak. This inconsistency could indicate a potential decline in Bitcoin’s value.
The crypto currency analyst notes that, unlike the last cycle, the network activity index has reached significant new highs supported by new use cases such as inscriptions. He also claims that Bitcoin’s network fundamentals have been the strongest since the 2016-2017 cycle. In a post dated December 18, 2023, Coutts drew a parallel between today’s crypto currency market and the US stock market of the early 1900s.
US Analogy in Crypto Currencies
He compares the current state or network status of the crypto currency ecosystem to the rising US economy of that era and predicts that ETFs will trigger a massive capital flow into crypto that could last for decades. The expert compares the current state of crypto markets with the US stock market before 1933 and the Securities Act of 1934. He points out that this environment in the US stock market led to the emergence of the greatest technical analysts like Dow, Elliot, and Wyckoff, along with trend and momentum strategies.
Coutts envisions a similar development in the crypto currency markets, which he describes as ideal for the use of momentum-focused and technical trend strategies. Considering the current market inefficiencies that could persist for several years, he predicts a rapid increase in factor-based and market timing strategies in the coming years.
