Economist Alex Kruger says that banks will hold BTC as the main reserve asset which is inevitable in the near-term so let’s read more in today’s Bitcoin news.
Crypto analyst and economist Alex Kruger says that the world’s major central banks will hold BTC as a reserve asset:
“I’ve changed my mind. Major central banks will eventually hold Bitcoin as a reserve asset. Central bank’s gold demand has averaged $23.4 billion per year for the last ten years.”
According to Kruger’s charts, the central banks’ demand for gold increased from $3.1 billion in 2010 to $30.5 billion in 2012 before declining all the way to $16.7 billion in 2020. The economist noted that the loose monetary policies of the banks are bringing the prices of the precious metal higher:
“Central bankers must not have taken the macro class where you learn that injecting liquidity and turning real rates negative makes the price of gold spike.”
With a clear picture of the increased appetite for gold, Kruger used the figures to outline the central bank’s possible demand for BTC:
“Assume now in five years, central banks’ demand for bitcoin stands at 5% of their gold demand. That would generate $1.2 billion in additional bitcoin buying pressure. $1.2 billion may not sound as much. Grayscale for example has added approximately $1.6 billion in December 2020 alone.”
The economist said that the $1.2 billion is just the beginning and he expects the number to go up after the first central banks purchases BTC as a reserve asset:
“One could assume that % would go up in time, against Bitcoin’s decreasing supply, while gold’s supply is rather constant through time. Price should spike sharply when the first major central bank jumps in, both for signaling reasons and because speculators try to front-run flows.”
As recently reported, In only one day, BTC marked a $1000 increase in its price which brought the leading cryptocurrency combined gains of $5000 in 2021. BTC blasts past $34,000 for the first time on Sunday in what was an extended record-setting holiday rally and adding the immediate reaction to the 12-year anniversary of Bitcoin’s network. Once the price crossed the $30,000 mark for the first time a day ago, it seemed that the resistance vanished but it increased by $3000 in seven hours and reached a new all-time high of $33,136 before settling down to float between $30K and $33K.
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