BTIG says cryptocurrency 'comes of age,' puts $50,000 target on bitcoin for 2021

Published Mon, Nov 30 20201:53 PM ESTUpdated Thu, Dec 3 20208:31 AM EST

Patti Domm @in/patti-domm-9224884/@pattidomm

BTIG strategists say cryptocurrency has come of age, and bitcoin should reach $50,000 by the end of 2021. Bitcoin surged to a new record Monday , topping its 2017 high of $19,800, according to data from Coin Metrics. The volatile cryptocurrency crossed above $19,000 last week but fell back to about $17,000 at the end of the week, before bouncing back over the weekend. The strategists initiated coverage of digital assets last week and said the market for digital currencies is very different than when frenzied trading led to a "blow-off" top in 2017. Since then, it has become accepted by major investors, corporations and governments, especially China. Bitcoin also has a finite supply of about 21 million. Tech stocks had a similar "blow-off" top, they note. It took 14 years for the Nasdaq to regain its 2000 high, and now the Nasdaq 100 is 150% above the March, 2000 peak that many experts believed was a ceiling. "It is BTIG's view that Bitcoin and other Digital Assets are poised to prove in the months and years ahead, as Tech stocks have, that 'It Is Different This Time,'" the strategists wrote. Julian Emanuel, head of equities and derivatives strategy, is an author of the report titled "Cryptocurrency Comes of Age." "Bitcoin appears poised to exceed its 2017 parabolic 'blow-off top' in a mere 3 years. Should Bitcoin's speed of ascent keep pace with the past three years and the degree of the rally approximate that of NDX [Nasdaq 100], $50,000 per Bitcoin is a reasonable year end 2021 Price Target," they wrote. Cryptocurrencies have become one of the asset classes most resistant to volatility driven by the pandemic and the U.S. election. "We believe the pandemic, its economic impact, and the response to the crisis by governments around the world have set the stage for digital assets to enter their next phase of growth driven by the accelerated adoption of cryptocurrencies," they wrote. "While the prices of Bitcoin and other cryptocurrencies dropped sharply amid the pandemic-driven market crash in March as investors facing margin calls sold holdings to raise liquidity, since then they have rebounded powerfully and are up about 160% year-to-date." They also said cryptocurrency is viewed as a hedge for ballooning U.S. government debt and the Fed's expanding balance sheet. On Monday, Tyler and Cameron Winklevoss told CNBC t hey see bitcoin gaining more than 25 times its current value as more investors use the cryptocurrency as an inflation hedge. The twins were early investors in bitcoin and founded the Gemini crypto-exchange. The BTIG strategists said PayPal's Oct. 21 announcement that it would allow its users to buy, sell and hold cryptocurrencies was a "watershed moment in terms of the mass adoption of digital assets." Paypal's 361 million active users could use ethereum, bitcoin, bitcoin cash and litecoin. PayPal acquired a license from New York state Department of Financial Services and joined with Paxos to make the cryptocurrencies a payment option for 26 million merchants globally, they noted. "The announcement, coming against the backdrop of an economic crisis during which the purchasing power of fiat currencies has been in decline amidst massive fiscal stimulus, signals an important step towards the normalization and legitimization of digital assets in real-world payments and likely will attract more entrants to the market, in our view," they wrote.

A woman touches an ATM machine for digital currency Bitcoin in Hong Kong on December 18, 2017.

Anthony Wallace | AFP | Getty Images

BTIG strategists say cryptocurrency has come of age, and bitcoin should reach $50,000 by the end of 2021.

Bitcoin surged to a new record Monday, topping its 2017 high of $19,800, according to data from Coin Metrics. The volatile cryptocurrency crossed above $19,000 last week but fell back to about $17,000 at the end of the week, before bouncing back over the weekend.

The strategists initiated coverage of digital assets last week and said the market for digital currencies is very different than when frenzied trading led to a "blow-off" top in 2017. Since then, it has become accepted by major investors, corporations and governments, especially China. Bitcoin also has a finite supply of about 21 million.