24. Januar 2021

Central banks will have Bitcoin as a store of value, predicts analyst

The economist believes that $1.2 billion would be just the beginning. He expects the number to increase after a first central bank buys bitcoin as a reserve asset.

Alex Krüger, a popular cryptomaniac trader and founder of Aike Capital believes that central banks around the world will buy Bitcoin and reserve value with digital assets. In a series of tweets he compared the banks‘ demand for gold and how they will inevitably have to have digital currency as a reserve asset.

Krüger is an economist, technical analyst and graduate of Columbia Business School. He is known for sharing a wealth of relevant information about the cryptomime market.

„[…] The world’s leading central banks will have Bitcoin as their Crypto Code reserve asset. The demand for gold from the BCs has averaged $23.4 billion per year for the past ten years.

According to Krüger’s shared chart, CB demand for gold soared by more than $30 billion in 2012, but fell by $16 billion in 2020. The economist shows that loose monetary policies by central banks have made gold more expensive.

„Bankers must not have taken the class where you learn that injecting liquidity and making real rates negative and making the price of gold soar.

With a clear view of the central banks‘ appetite for gold, Krüger uses the figures to illustrate the possible demand from central banks for Bitcoin.

„Suppose that now central bank demand for Bitcoin is at least 5% of their demand for gold. This would generate $1.2 billion in bitcoin buying pressure. $1.2 billion may not seem like much. Grayscale (cryptomime fund) increased approximately $1.6 billion in December 2020 alone.

The economist believes that $1.2 billion would only be the beginning. He expects the number to increase after a first central bank buys bitcoin as a reserve asset.

„It can be assumed that the % would increase over time, against Bitcoin’s declining supply, while the gold supply is quite constant over time. The price should rise sharply when the first major central bank intervenes, both for signalling reasons and because speculators try to anticipate flows“.