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Saxo Bank sees huge gains for cryptocurrencies in 2017, expects bitcoin to test $2,100
As the countdown for 2017 begins, Saxo Bank, the online multi-asset trading and investment specialist, has released its annual set of 'Outrageous Predictions' for the forthcoming year.
"After a year in which reality has managed to surpass even seemingly unlikely calls - with the Brexit surprise and the US election outcome - the common theme for our Outrageous Predictions for 2017 is that desperate times call for desperate actions”, Steen Jakobsen, Chief Economist at Saxo Bank, commented. "With change always happening in times of crisis, 2017 may be a wakeup call which sees a real departure from the 'business as usual', both in central bank expansionism and government austerity policies which have characterized the post-2009 crisis”.
Among other predictions, the bank sees huge gains for bitcoin under President Trump’s regime and expects it to test $2,000.
“A Trump spending binge propels dollar sky high forcing emerging-markets to seek alternatives, creating ideal conditions for Bitcoin to test $2,000”, the report said.
The report explains that the US fiscal spending under President Trump would increase budget deficit to $1.2-1.8 trillion (from $600 billion), causing a tremendous surge in the US growth and inflation. This would force the Federal Reserve to accelerate the hike and the US dollar would reach new highs – essentially leading to a “domino effect” in emerging markets that will start looking for fiat alternatives.
In such a situation, the bank expects countries like China and Russia to start looking for alternatives to the fiat money system dominated by the US dollar and its over-reliance on US monetary policy. This will lead to an increase in popularity of cryptocurrencies, with bitcoin benefiting the most.
“As the banking systems and the sovereigns of Russia and China move to accept Bitcoin as a partial alternative to the USD, Bitcoin triples in value, from the current $700 level to $2,100”, it said.