CitiBank also exposed clients to its astronomical Bitcoin target of $318,000 by December 2021.
CitiBank MD, and former FX technician, Tom Fitzpatrick, points out distinct analogies between the 1970 gold market and Bitcoin in his latest report, “Bitcoin: 21st Century Gold.”
The seeds of the 1970 bull market in gold were sown back in 1944. After World War II, forty-four countries signed the Bretton Wood Agreement, which shaped the global currency market until 1973.
The agreement pegged the U.S. dollar to gold and all the other currencies against the dollar. It attempted to build a regime where the U.S. dollar was equivalent to gold as a reserve currency.
And, the U.S. became quite successful in achieving this vision.
However, with global industrialization and inflation in the dollar, the preference for gold and other currencies began growing. This caused a gold rush by 1970, as people rushed to swap their bills for the precious metal. Hence, in 1971 US president Richard Nixon broke the ties between greenbacks and gold, giving birth to the fiat regime that we now know.
With a relatively free currency market, gold’s price grew enormously for the next 50 years.
The monetary inflation and devaluation of the greenback are the basis of Fitzpatricks’ comparison of Bitcoin with gold. The report reads:
“Bitcoin move happened in the aftermath of the Great Financial crisis (of 2008) which saw a new change in the monetary regime as we went to ZERO percent interest rates.”
Fitzpatrick pointed out that the first bull cycle in Bitcoin from 2011 to 2013 when it increased by 555 times resulted from this.