(ZH) Bank Analyst Puts Bitcoin Price Prediction "As High As $318,000"

Bank Analyst Puts Bitcoin Price Prediction "As High As $318,000"

In brief
  • A senior Citi executive predicts Bitcoin may reach the six-figure price mark in 2021.
  • Bitcoin's rise has been similar to gold in the 1970s, the executive said.
  • The rise of state-backed digital currencies also shows a changing regime, one that supports the growth of Bitcoin, he added.
Tom Fitzpatrick, a managing director at Citi, has predicted Bitcoin’s price may reach over $318,000 in 2021 as per a note to institutional clients last week. He called the move amidst an uncertain macro environment and its similarities to the gold market of the 1970s.

While long called “digital gold” by crypto fanatics, Bitcoin has so far been a poor store of value (due to its infamous price swings) or medium of transfer and has emerged as a trading vehicle instead. However, as per Fitzpatrick, such a backdrop is exactly what primes the asset as one that would sustain an eventual “long-term trend.”
Using technical analysis—forecasting of future asset prices using past examples, similarities, and data—Fitzpatrick put out the six-figure Bitcoin prediction if it followed a similar trajectory of the past seven years.
“You look at price action being much more symmetrical or so over the past seven years forming what looks like a very well defined channel giving us an up move of similar timeframe to the last rally (in 2017),” he said, as shown in the image below.
A Citibank exec has a $318,000 price target for Bitcoin. Image: Citi
But the $318,000 price target is not just based on drawing lines on a chart.

Fitzpatrick called Bitcoin the “new gold” and said the shaky macroeconomic climate of today is creating space for a new financial structure—similar to the backdrop of Bitcoin’s creation back in 2008, one of the biggest recessions in history.
A changing monetary environment
The Citibank executive said that monetary policy in the US has historically been shaped by two factors: the Federal Reserve’s affinity to print money (to protect its economy) and the eventual lower valuation of its fiat currency (called debasing). This was last since in the 1970s—when the Great Depression took place—before this year.
That, in Fitzpatrick’s opinion, creates both a renewed demand for gold and its digital counterpart, Bitcoin.
“It is an asset with limited supply. It moves across borders and its ownership is opaque,” he said.
Fitzpatrick added that while Bitcoin may be subject to more regulatory constraints going forward, it was a “natural store of money” to avoid exactly that issue. Meanwhile, the rise of state-backed digital currencies—such as China’s digital Yuan—was yet another indication of a changing financial regime that could, in turn, support the rise of Bitcoin, he noted.
Meanwhile, crypto circles on Twitter expressed excitement over the price target, one that would value the Bitcoin network at a massive $5.8 trillion figure (up from its current $300 billion) at its current circulating supply.
The Bitcoin bulls are known to be optimistic. And for once, the banks are too.

    WSJ : The Effects of Massive Wildfires Can Reach the Stratosphere and Linger for

    The Effects of Massive Wildfires Can Reach the Stratosphere and Linger for Months
    Australian smoke plumes created an ozone-layer hole, but the extent of damage from such novel weather events remains unclear

    Massive wildfires are driving smoke clouds to record heights in the stratosphere, U.S. and European scientists say. What they don’t know yet is just how damaging the effects might be.

    From the Arctic to Australia, unusual storms powered by wildfires have spewed smoke to altitudes well above where commercial jets usually fly. In the stratosphere, which stretches from around 6 to 31 miles above the Earth, the smoke has affected the air across thousands of miles and blocked sunlight on a “planetary scale,” mimicking the effects of a volcanic eruption, the scientists said. They said the soaring wildfire plumes are a byproduct of recent years of supersized wildfires, in which climate changes caused by rising temperatures have played a major role, most scientific experts agree.

    “It is a new form of severe weather,” said David Peterson, a meteorologist at the U.S. Naval Research Laboratory (NRL) in Monterey, Calif.

    In the highest of such plumes so far, Australian wildfires this past January generated firestorms that spewed a swirling vortex of smoke as wide as the state of Montana up to a record 21 miles high. The smoke circled the world twice before dissipating in April, according to two new independent studies. The scientists tracked the plume using sensors on four satellites and aboard the International Space Station.

    Their data shows that the smoke blocked sunlight to an extent never before recorded from wildfires, comparable to the cumulative effect of all the moderate volcanic eruptions of the past 30 years. Moreover, the plume contained enough noxious fumes to etch a temporary hole in the planet’s protective ozone layer, an international team of scientists from France, the U.K. and Canada reported in the journal Communications Earth & Environment in September.

    “That Australian smoke plume was really a jaw-dropping phenomenon,” said lead author Sergey Khaykin, who studies the stratosphere at the Latmos laboratory of atmospheric research and space observations at Sorbonne University in France. “We should be expecting more of these events as the climate warms.”

    The fire-induced thunderstorms, known technically as pyrocumulonimbus events, are becoming more frequent.

    In the past three years, these firestorms occurred during wildfires in places such as Portugal, South Africa and Argentina where they were previously unknown. Wildfire storms this fall in California and Colorado sent smoke plumes up to 10 miles high that altered air quality as far away as Europe. The 21-mile-high Australian plume earlier this year was the third major outburst of wildfire smoke to set a stratospheric record since 2009, each one progressively higher and more severe.

    “It appears as though the intensity of the major events is getting stronger,” said NRL meteorologist George Kablick III in Washington, D.C., who led a team of researchers studying the Australian smoke plume. They reported their findings earlier this year in Geophysical Research Letters.

    Taken together, the new research offers evidence of how the pollution and smoke from regional wildfires driven by severe droughts and heat waves can become a global event, affecting people far from the scene of a major conflagration, the scientists said. On average, smoke from burning forests and grasslands results in an estimated 339,000 additional deaths a year world-wide due to smoke inhalation, says an international research team that conducted a systematic global health study in 2012 of air pollution from wildfires. The carbon particles and other pollutants in the smoke can aggravate chronic heart and lung diseases, such as asthma or bronchitis, and worsen diabetes, particularly among children and the elderly, according to the American Lung Association.

    Even so, no one knows yet whether there are any long-term consequences from injecting so much smoke into the stratosphere. “There are a lot of unknowns,” said the NRL’s Dr. Peterson, who studied pyrocumulonimbus clouds that formed during the 2019 Williams Flats Fire in Washington state.

    To generate high-altitude smoke, these thunderstorms require a mixture of extreme drought, hellish heat waves, moisture and strong surface winds, according to meteorologists who study fire-related weather. When conditions are right, the hot updraft from burning woodlands and brush can supercharge the towering anvil-shaped thunderhead of a major storm, sucking up smoke at ground level and speeding it to extreme heights.

    “The fire heating drives the updraft that feeds the storm. This ends up acting like a giant chimney,” Dr. Peterson says.

    In Australia and elsewhere, such conditions are in line with a long-term increase in extreme heat events linked to a century of rising regional temperatures, according to the Australian Bureau of Meteorology’s “2018 State of the Climate report.” Globally, the last five years have been the warmest since modern record-keeping began, according to the U.S. National Oceanic and Atmospheric Administration.

    Generally, fire seasons in many parts of the world are getting longer and more frequent, according to a 2015 analysis of 35 years of meteorological data by the U.S. Forest Service Fire Sciences Laboratory. Overall, 54% of the world’s vegetated areas experienced long fire weather seasons more frequently between 1996 and 2013 as compared with 1979-1996, the study published in Nature Communications showed.

    The fire-driven thunderstorms were first identified about 20 years ago. But their impact on the stratosphere was “deemed small” until 2017, scientists said.

    In that year, wildfires raging through Canada’s Pacific Northwest triggered a cluster of seven fire-driven thunderstorms in a single five-hour period. Together, they lofted record amounts of smoke high into the stratosphere, where there is no rain to wash the clouds away, the scientists said.

    At that altitude, the wildfire plume blocked more sunlight than the 2009 eruption of Russia’s Sarychev Peak, an active volcano in the Kuril Islands northeast of Japan. That eruption spewed so much ash into the atmosphere that commercial airline flights had to skirt the region to keep engines from choking on ash intake.

    But the stratospheric plume from Australia earlier this year was even larger, “a super-outbreak,” in Dr. Peterson’s words.


    As New Year’s Eve approached last December, Australia was already in its 35th month of extreme drought—the country’s hottest and driest period in modern times, scientists said. Wildfires had consumed 14.3 million acres—about one-fifth of the country’s temperate forests. Temperatures topped 120 degrees Fahrenheit in some areas. Wind speeds gusted up to 80 mph.

    On New Year’s Day, fire scientists counted 18 fire-driven thunderstorms along the Australian coast of New South Wales, the scientists said.

    By Jan. 7, the soaring embers, ash and soot from so many firestorms compacted itself into one self-contained bubble of fumes. Warmed by the sun, it started to spin. Like a balloon, it rose ever higher in the air as it circled the world, the scientists said. All told, the plume injected between 300,000 tons and 400,000 tons of carbon-rich smoke into the stratosphere, the scientists said.

    “This plume was unprecedented in size, scale and longevity,” said Dr. Kablick. “It was something we had never seen at this intensity before. I keep using the word unprecedented, but it’s true.”

    FT : UK prepares to make ‘big bet’ on hydrogen power

    UK prepares to make ‘big bet’ on hydrogen power
    Boris Johnson set to lay out plans for a ‘green industrial revolution’ to tackle climate change

    On a secluded RAF base five miles north of Hadrian’s wall in Cumbria, three ordinary looking brick terrace houses are at the centre of an experiment that could radically slash emissions from one of the dirtiest parts of the UK economy.

    The three specially built uninhabited properties have been fitted with boilers running entirely on hydrogen, rather than the natural gas that heats most UK homes — which are responsible for nearly a fifth of the country’s carbon emissions.

    UK prime minister Boris Johnson this week will lay out his plans for a “green industrial revolution”, and has pledged to make a “big bet” on technologies such as hydrogen, which is emerging as an area of global interest as countries adopt targets to halt carbon emissions.

    The Cumbrian trial, led by energy consultancy DNV GL, is one of many hydrogen projects under development in the UK as it joins other countries, such as Japan and Germany, in researching whether the gas could remove emissions from some of the most polluting sectors of the economy — including heating, heavy industry and long-distance transport. 

    “Hydrogen has been with us as an industrial gas that is widely used for 100 years or more. What has changed . . . is a growing realisation that it could play a really important part in decarbonisation,” said Jon Maddy, director of the hydrogen centre at the University of South Wales and a member of the UK government’s hydrogen advisory council. 


    This has not gone unnoticed by researchers in Cumbria. “Very quickly we discovered an amazing level of interest [in the trial],” said Hari Vamadevan, head of DNV GL’s oil and gas operations in the UK.

    Although hydrogen has long been used in industrial processes, such as the manufacture of petroleum products, currently it is largely derived from fossil fuels and is responsible for 830m tonnes of carbon emissions a year globally — equivalent to emissions of the UK and Indonesia combined, according to the International Energy Agency.

    Governments and companies now want to produce the fuel without releasing carbon dioxide into the atmosphere — either through the electrolysis of water (known as “green” hydrogen) or by capturing and safely securing carbon emissions when it is produced from natural gas (“blue” hydrogen). 

    Supporters of this so-called clean hydrogen argue it could provide a neat answer to slashing emissions from areas such as heating and long-distance transport because it may not require behavioural change.

    “We’ve done a lot of research . . . that says one of the biggest things customers don’t want is disruption,” said Tim Harwood, who is in charge of hydrogen projects at Northern Gas Networks, which owns local gas grids in north-east England.

    “If the government would mandate hydrogen-ready boilers for instance . . . they are easily convertible to hydrogen when the time comes by just simply changing a few small parts and probably half an hour disruption.”

    Industries such as chemicals and steel that require high heat currently have few options other than hydrogen to replace fossil fuels, say experts.

    “For the chemical industry, it will replace natural gas for making ethanol and ammonia,” said Grete Tveit, who leads low carbon solutions at Equinor, the Norwegian energy group, which plans to supply “blue” hydrogen to a large chemicals park in Hull as part of a wider project to decarbonise industry in the Humber area of north-east England. 

    Supporters of the fuel — including companies such as Anglo American, Equinor, Orsted and Siemens — want the government to produce a hydrogen strategy setting out particularly how large projects could be funded and industries incentivised to switch from fossil fuels.

    “We need to see at least some indication of a business model before we start spending the large money,” said Ms Tveit.

    Other countries and regions have already set targets that are giving industry the confidence to invest — for example, the EU in July said it wanted to install at least 40GW of green hydrogen capacity by 2030.

    UK ministers have promised to respond “early” next year, while a long-awaited energy white paper, expected before Christmas, will also include plans for hydrogen. “Hydrogen has the potential to be a vital part of the UK’s future net zero energy mix,” said the Department for Business, Energy and Industrial Strategy.

    But sceptics argue the properties of hydrogen carry risks. For instance, it carries a fraction of the calorific value of natural gas and has a smaller molecule, so there is a greater risk of leaks.

    Richard Lowes, of Exeter university, argues that fossil fuel companies have been “overselling” hydrogen — particularly for heating — because it would allow them to continue using their natural gas infrastructure.

    He believes hydrogen is likely to have “niche” uses and would potentially be most useful for decarbonising heavy industry or for storing renewable-produced electricity for longer periods than batteries.

    “I think we are totally carried away,” said Mr Lowes. “The trouble is we just don’t know at the moment because it’s never been done and there all of these uncertainties.”

    Rather than count on hydrogen for heating, companies such as British Gas have backed the rollout of electric heat pumps in homes, saying it is “not clear when hydrogen will be ready for domestic use”. 

    Back in Cumbria, those involved in the hydrogen testing project say concerns, such as those of Mr Lowe and others will only be answered through trials.

    “There is no way any of us in the gas industry would move forward if it [hydrogen] was going to be more risky,” said Antony Green, hydrogen project director at National Grid.

    “I think it’s understanding the differences [with natural gas] and deploying the right mitigations.”

    FT : Sweden unveils tougher coronavirus restrictions

    Sweden unveils tougher coronavirus restrictions
    Europe’s outlier on Covid-19 is forced to step up measures to fight the virus as cases surge

    Sweden has unveiled tougher restrictions to fight coronavirus as Europe’s outlier on Covid-19 is forced to step up measures to fight the virus as it faces surging numbers of cases and deaths.

    Warning that the situation was “going to get worse”, Prime Minister Stefan Lofven said on Monday the limit on public gatherings in Sweden would be cut from 50 people to eight.

    “It is a clear and sharp signal to every person in our country as to what applies in the future. Don’t go to the gym, don’t go the library, don’t have dinner out, don’t have parties — cancel!” Mr Lofven told a press conference.

    Sweden has stood out from the rest of Europe by refusing to order a legal lockdown and instead preferring to rely on recommendations to people to wash their hands, keep a distance, and work from home.

    The country’s health authorities said in the spring that Sweden was unlikely to be hit by a second wave as it suffered more deaths than its Nordic neighbours in the first wave. But Sweden’s cases per capita, hospitalisations and deaths are all increasing rapidly now.

    Mr Lofven called the ban on large public gatherings a “new normal”. He added: “Advice and recommendations went a long way this spring, but now compliance [with them] is lower. Now more of a ban is needed to bring down the curve of the number infected.”

    The new ban applies to public gatherings such as concerts, lectures and theatre performances, but not to private gatherings. Sweden last week banned the serving of alcohol after 10pm, and now has special local recommendations such as to avoid public transport or shops in nearly the entire country.

    Most of its response against Covid-19 has been based on recommendations to the public, which have produced what its state epidemiologist Anders Tegnell has described as a de facto lockdown with people cutting travel and social contact significantly.

    But Sara Byfors, an expert at the Swedish public health agency, conceded to the Financial Times last week that authorities did not know why Sweden and other European countries that were hit hardest in the first wave were also facing the most pressure now.

    Sweden’s cases per capita are currently 10 times higher than Finland and four times higher than Norway. Last week, the rate at which people were being admitted into hospital was growing faster in Sweden than any other European country. And after several months of relatively low numbers of deaths, Sweden reported more than 100 in three days last week.

    Mr Lofven struck a solemn tone on Monday, twice telling Swedes: “This is a testing time. It is about your and my choices every day, every hour, every moment that will determine how we manage this. So make the right choice for yourself, for society, and for Sweden.”

    Asked by the Financial Times why Sweden did not introduce a lockdown, Mr Lofven replied: “We don’t believe in a total lockdown. We believe that the measures we are taking are appropriate.” He added the “tough” measures were the most invasive in Sweden in “modern times” and sent a clear message to the public on the need for social distancing.

    >>> US Gapping down

    Gapping down
    In reaction to earnings/guidance
    :

    • CSPR -12.5%, JD -2.2%

    Other news:

    • RAPT -21.2% (reports initial clinical data from its ongoing Phase 1/2 trial for FLX475 in multiple cancer indications)
    • ZM -5.9% (work from home play out of favor in early trade)
    • QDEL -4.8% (Quidel CEO on CNBC: Tests will continue to be useful, even if we get a vaccine)
    • LOGI -3.5% (work from home play out of favor in early trade)
    • VXX -2.8% (trading lower with US futres off to a strong start)
    • REZI -2.5% (files mixed securities shelf offering)
    • KOD -2.4% (completes enrollment of DAZZLE Phase 2b/3 pivotal study of KSI-301)
    • GH -1.8% (proposes $1 bln principal amount of convertible senior notes due 2027)

    >>> US Gapping up

    Gapping up
    In reaction to earnings/guidance
    :

    • CRNC +7.6%, AZUL +6%, TSN +4%, VOD +3.2%, PANW +2.8%, INBX +1%

    M&A news:

    • FBM +26.9% (Foundation Building Materials to be acquired for $19.25 per share in cash)
    • BBVA +18.4% (PNC agrees to purchase BBVA USA Bancshares for $11.6 bln)
    • TCO +8.3% (Taubman Centers and Simon Property Group (SPG) modify merger price to $43.00 per share in cash)
    • SPG +6.6% (Taubman Centers and Simon Property Group (SPG) modify merger price to $43.00 per share in cash)
    • PNC +4.5% (PNC agrees to purchase BBVA USA Bancshares for $11.6 bln)
    • UBER +3% (co is in talks to sell ATG self-driving unit, according to TechCrunch)

    Other news:

    • VJET +20.9% (receives follow-up order for three additional units of its new high-speed 3D printer)
    • MRNA +17.4% (COVID-19 vaccine candidate meets its primary efficacy endpoint in the first interim analysis of the Phase 3 COVE study; vaccine efficacy of 94.5%)
    • ABUS +14.3% (presents Phase 1a/1b clinical trial results for AB-729 in Chronic Hepatitis B)
    • INO +12.3% (received clearance from the U.S. Food & Drug Administration (FDA) to proceed with the Phase 2 segment of its planned Phase 2/3 clinical trial for INO-4800, its COVID-19 vaccine candidate)
    • OBSV +11.1% (reports topline results of the PROLONG proof-of-concept trial of Ebopiprant)
    • BYSI +9.8% (announces positive topline results from its PROTECTIVE-2 Phase 3 registrational trial of plinabulin in combination with pegfilgrastim for prevention of chemotherapy-induced neutropenia)
    • PLTR +6% (Soros Fund (George Soros) and Third Point (Dan Loeb) discloses new portfolio positions in 13F filing)
    • LQDA +4.3% (Liquidia Technologies approve the previously announced RareGen merger agreement; expected to close on or about November 18, 2020)
    • FLR +4% (announces that the company has reached an agreement with Sargent & Lundy to collaborate with joint marketing and design services for the execution of new NuScale Power small modular nuclear reactor plants in North America)
    • RIDE +2.8% (releases business updates; remains on track to begin production of the lordstown endurance in September 2021)
    • DVAX +2.4% (Dynavax and Biological E. Limited initiated a Phase I/II clinical trial of its COVID-19 subunit vaccine candidate in India following approval from the Drugs Controller General of India)
    • BHC +2.3% (announces investigational in vitro data indicating complete inactivation of SARS-CoV-2 with LUMIFY and BESIVANCE eye drops preserved with benzalkonium chloride)
    • AOSL +1.8% (Alpha and Omega Semi announces that COO and co-founder Dr. Yueh-se Ho will retire; Stephen Chang promoted to President)
    • MRK +1.6% (announces that the FDA has approved KEYTRUDA for triple-negative breast cancer)
    • JNJ +1.5% (Johnson & Johnson and U.S. Department of Health & Human Services expand agreement to support next phase of COVID-19 vaccine candidate research and development)
    • CTVA +1.4% (Starboard Value (Jeffrey Smith) discloses new portfolio positions in 13F filing)

    >>> US Early premarket gappers

    Early premarket gappers

    • Gapping up:
      • FBM +25.3%, VJET +22.5%, BBVA +16.6%, OBSV +16.4%, ABUS +10.2%, TCO +8%, DVAX +5.8%, PLTR +5.7%, AOSL +5.2%, SPG +3.8%, UBER +2.5%, VOD +2.3%, QDEL +2.2%, PNC +1.8%, JNJ +1.6%, ATRA +1.6%, CTVA +1.4%, INBX +1%
    • Gapping down
      • CSPR -16.6%, REZI -3%, VXX -2.2%, JD -1.9%, ZM -1.5%, LOGI -1.5%

    BReaking Views ; New kid on the block, Nexi bulks up for next round of payments

    Nexi has turned itself from potential prey to predator in Europe’s rapidly consolidating payments industry. Sunday’s acquisition of Nordic rival Nets, following the previously announced purchase of local operator Sia, will propel the 9.4 billion euro Italian group to the top ranks of European companies processing financial transactions. It will now go head-to-head with French rival Worldline for the next round of deals.
    The all-share deal will give Nets shareholders, including buyout firm Hellman & Friedman, around 31% of the enlarged company, once Sia is included. This values the Nordic group’s equity at 6 billion euros, based on Nexi’s closing share price on Friday. The 11% bump since the pair first confirmed the talks two weeks ago reflects a rally in Nexi’s shares.
    The latest acquisition gives Nexi Chief Executive Paolo Bertoluzzo operations in some 25 European countries and grafts Nets’ expertise in processing e-commerce transactions onto the buyer’s strength in serving merchants. The addition of Sia at a cost of close to 5 billion euros will bring infrastructure for clearing and settling payments.
    Based on current share prices, the three companies will have a combined market value of more than 20 billion euros. Projected cost savings from the two deals of 195 million euros a year, taxed at 25% and capitalised, add a further 1.5 billion euros of value. The enlarged Nexi will still be smaller in market value terms than Worldline, which is in the process of absorbing the 8 billion euro Ingenico. But Nexi’s pro-forma EBITDA of 1.5 billion euros for this year will surpass the estimated 1 billion euros produced by its expanded French rival.
    Neither company is showing signs of slowing down. With the number of independent payments companies dwindling, the next wave of acquisitions is likely to focus on bank-owned payments operations. Lenders like France’s Société Générale, BBVA of Spain and Polish bank Pekao still tend to handle most of their own payments services. But Covid-19 is putting pressure on them to raise cash. Intesa Sanpaolo pocketed around 1 billion euros last year by selling its merchant acquiring businesses to Nexi.
    Worldline and Nexi won’t have the European industry to themselves. U.S. giants like the $56 billion Global Payments already have a foothold on the continent. Indeed, to maintain their status, the predators of Europe’s payments business may eventually have to consider joining forces.