Bitcoin may rally 30%, scale $28,000 by the year-end, forecasts Deutsche Bank

Representative image

Even as the world’s largest digital currency by market capitalisation continues to stay above the $19,000 mark amid a broader market slump, Bitcoin (BTC) could go as high as $28,000 by the end of the year, according to Deutsche Bank.

BTC is currently trading flat at $19,250 after making a low of $18,729 on Friday morning, a far cry from the high of $48,234 level seen in March this year.

In November 2021, BTC had reached an all-time high of nearly $69,000.

An analysis by Deutsche Bank strategists Marion Laboure and Galina Pozdnyakova suggests that BTC could rally around 30 percent from its current levels, however still over halfway from its all-time high.

“The digital currency is more like diamonds -- a highly marketed asset -- rather than gold, a stable safe-haven commodity,” they said.

Equating BTC with the leading diamond company The De Beers Group, Laboure and Pozdnyakova said they changed the perception of consumers with rigorous advertising efforts.

“By marketing an idea rather than a product, they built a solid foundation for the $72-billion-a-year diamond industry, which they have dominated for the last eighty years. What’s true for diamonds, is true for many goods and services, including Bitcoins,” they said.

Raising concerns over the valuation models of cryptos, they said, “Stabilising token prices is hard because there are no common valuation models like those within the public equity system. In addition, the crypto market is highly fragmented,” they said. “The crypto freefall could continue because of the system’s complexity.”

Meanwhile, according to JP Morgan, deleveraging of the crypto markets is in an advanced stage, which may result at the end of the bear market soon.

“The severity of deleveraging of some crypto firms could be so severe that they suggest that the tremors from this year’s crypto market fall continue to reverberate. The fact (is) that crypto entities with the stronger balance sheets are currently stepping in to help contain the contagion,” according to JPMorgan strategist Nikolaos Panigirtzoglou.