• Bitcoin losing correlation to stocks as rally continues
  • Raoul Pal believes a case for USD 1 million Bitcoin is not hard to see

Despite the tumble from USD 9,800 to USD 8,100, Bitcoin is back at USD 8,900 and climbing so buyers should not be worried for the correction. Trading looks strong on the weekend, although bulls will be cautious as the volume still hasn’t reached significant amounts that would suggest a huge FOMO is on the way. Nevertheless, profit-taking is not denting their hopes too much either.

So far, Bitcoin is still outperforming gold and stock markets, even with the latter still rampaging towards all-time highs in unprecedented and perplexing fashion.

According to data sourced from analysts Skew, the S&P 500, the equity index for Wall Street, is down 2.2% on the month to date, while gold fared a little less worse at a 1% decline. Bitcoin, on the other hand, looks strong at nearly 6% month to date.

Not only that, Bitcoin continues to be the best performing asset of the year so far, with a 29% gain year to date, and oil compared terribly with WTI crude now 66% down thanks to the massive production glut, coupled with low demand for fuel as pandemic lockdown shutters most industries and transport.

But another significant thing to come out of this data is that Bitcoin is moving away from its correlation to stock markets, something that many observers said was apparent over the last two months, especially with the pandemic declaration by WHO triggering the Black Thursday sell off in March. Here, stocks and oil and gold lost value as Bitcoin also crashed from USD 10,000 to USD 3,867, and then tracked the stock markets in recovery as it almost doubled in the following four weeks.

But in the last two weeks, Bitcoin posted double-digit percentage gains while equities saw moderate losses. Analysts believe this could have something to do with halving, now just two days away, which will result in an immediate 50% reduction in new Bitcoin being produced as part of its hard-coded deflationary model. This makes its appeal even more interesting as an asset to own and it is possible that the recent price gains are due to new investors buying into the hype.

But the fundamentals are growing ever stronger anyway. Glassnode data shows that Bitcoin’s network now at its busiest since 2018, with the number of unique addresses active on the network jumping to 947,088 on this week to be at its highest since January 2018, suggesting that more investors are coming in.

Coupled with ever-growing hash rate — the last difficulty jumped 0.88% — miners aren’t ready to let go and are now cumulatively contributing 140 exahashes per second to make Bitcoin the most secure crypto blockchain in the world.

Meanwhile, forget about six-digit valuations, we’re hearing talk again of 1 million dollar predictions, and this time’s it’s not from John McAfee, but Global Macro Investor CEO Raoul Pal, who says it’s more than easy to see a case for a “vastly higher” price for the world’s most-traded crypto asset.

If Pal is to be believed, the chance of Bitcoin touching USD 40,000 and even USD 1 million will rise dramatically if USD 10,000 is hit — and it has. He summarized:

“Whatever plays out, after a KEY technical break like today, the probability of vastly higher prices has risen dramatically… Well, that gives you a price object for this run potentially (key word – potentially) of $1m.”

Last month, the investor released a report talking up Bitcoin against fiat and used classic charting methods to present a USD 40,000 valuation. Logarithmic charts continue to produce “a 1 standard deviation move to $40,000 and a 2 standard potential to $1m (potential)”.

Crypto influencer PlanB, whose stock-to-flow Bitcoin price forecasting model is popular due to its accuracy thus far, was also referenced, and this model shows an average pricing of USD 288,000 between 2020 and 2024, with a maximum potential double of that.

Pal summed up:

“Add to that the ENTIRE worlds central banks are either seeing their currencies collapse to the almighty dollar (BRL, TRY, ARG, etc) or they are printing money like CRAZY. HUGE quantitative easing fiat meets the hardest money that automatically quantitatively tightens. $BTC wins.”

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