According to Capriole Investments during the incoming decade BTC could have an “Explosive Breakout,” similar to that of the Gold in the 1970s.
While Bitcoin’s current price is 80% below its all-time high of around $69,000, the medium-term outlook for the asset remains bullish for some: Capriole believes 2023 will be a strong year for the cryptocurrency. The reason lies in the history of the world economy over the last century; especially the history of the United States, after the dollar completely detached from gold in 1971.
The main store of value at the time was gold, and over the next decade this asset has seen incredible growth.
According to Capriole the gold was so much smaller in the 1970s (Bitcoin is even smaller today by comparison), it has experienced substantial upward momentum thanks to a decade of inflation and high interest rates.
This is one of the reasons they believe Bitcoin will do the same, and more, this decade. Given that Bitcoin accounts for only 2.5% of gold’s market cap, its 80% decline from all-time highs constituted just 2% of the overall decline in hard money (gold + BTC).
In November 2022, they noticed saw an overall decline in hard money of 24% – figures comparable to those recorded by gold in 1970 and 1975. Capriole thinks Bitcoin has more growth potential than gold because it is a smaller asset. Similar demand for both assets would translate into a 40x greater price change for Bitcoin. The research company believes that the Fed is no longer able to afford to be so aggressive (since the debt is much higher) and we have a digital, accessible and robust form of money: Bitcoin.