Thomas Fitzpatrick, the Global Head of CitiFXTechnicals at Citibank, in his report "Bitcoin: the gold of the 21st century" compares that the expected movement in the price of Bitcoin in 2021 resembles that of gold in the 1970s.
In the report, he estimates a price for Bitcoin of US $ 318,000 by the end of 2021, that is, in 13 and a half months. Considering that today Bitcoin is at approximately US $ 16,000, the objective that the work raises is extremely optimistic. Not even the most fanatical proponents of Bitcoin dare to put such an aggressive number in such a short period of time.
The reserved report, authored by Fitzpatrick, would already be circulating among Citibank clients and delves into the comparison with what happened in the 1970s with the gold market: it began at US $ 35 an ounce of gold and ended 10 years later in $ 850, up 2,300% in a decade.
The seed of the strong increase in the price of gold in 1970 was sown back in 1944. After World War II, 44 countries signed the Bretton Wood Agreement, which shaped the world currency market, until 1973.
This Bretton Wood deal tied the United States dollar to gold, and all other countries' currencies, to the United States dollar. It was an attempt to build a regime where the dollar was the equivalent of gold in terms of being a store of value worldwide.
In this way, the United States would be able to impose its currency as primus inter pares, something that it clearly achieved since the dollar was imposed as the currency most used in international trade.
But at that time, with increasing industrialization throughout the world, and the inflation that manifested the dollar, preferences for gold began to increase strongly.
That sparked a run on gold in 1970, as many nations were rushing to exchange their treasured dollars for gold. In 1971 the then president of the United States, Richard Nixon, was forced to break the "gold standard" that tied the US dollar to a fixed amount of gold deposited in a vault. From there, the fiduciary system that governs to this day was born.
And since then, gold followed an upward path that did not stop, in fact Fitzpatrick forecasts an ounce of gold between $ 2,000 and $ 4,000 in the future.
