Even as the world’s largest digital currency by market capitalization continues to stay above the $19,000 mark amid a broader market slump, Bitcoin (BTC) could go as high as $28,000 by the end of the year, according to Deutsche bank.
BTC is currently trading flat at 19,250 after making a low of 18,729 on Friday morning, a far cry from the high of $48,234 level seen in March this year.
In November 2021, BTC had reached an all-time high of nearly $69,000 in November last year.
An analysis by Deutsche bank strategists Marion Labore and Galina Pozdnyakova suggests that BTC could rally around 30% from its current levels, however still over halfway from its all-time high.
Digital currency like diamonds
“The digital currency is more like diamonds — a highly marketed asset — rather than gold, a stable safe-haven commodity,” they said.
Equating BTC with the leading diamond company The De Beers Group, Labor and Pozdnyakova said they changed the perception of consumers with rigorous 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. What’s true for diamonds, is true for many goods and services, including Bitcoins,” they said.
Raising concerns about the valuation models of cryptos, they said, “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 said. “The crypto freefall could continue because of the system’s complexity.”
Bear market to end soon: JP Morgan
Meanwhile, according to JP Morgan, deleveraging of the crypto markets is in its advanced stage, which may result in the end of the bear market soon.
“The severity of deleveraging of some crypto firms could be so severe that they “suggest that the tremors from this year’s crypto market fall continue to reverberate. The fact that crypto entities with the stronger balance sheets are currently stepping in to help contain the contagion,” according to JPMorgan strategist Nikolaos Panigirtzoglou.