Demeester provided an in-depth analysis of the current state and future trajectory of Bitcoin, addressing its undervalued status, its macroeconomic tailwinds, and its adoption by nation-states.
In a detailed social media thread on company Adamant research report in April 2023, Demeester reviews its analyzes and recommendations.
His publication starts as follows:
“1/ Our report from last April predicted “for bitcoin to trade in a range of $22k to $42k, until a new multi-year bull market pushes it well north of $120k.” Now that bitcoin trades at $42k, let’s review our analysis & recommendations in a summary thread.”
Demeester suggests that Bitcoin is currently undervalued considering its role as a long-term store of value. This outlook is supported by the macroeconomic environment in which traditional financial instruments such as bonds are in a bearish cycle and inflation is returning.
His view implies that the market has yet to fully recognize Bitcoin’s potential as a hedge against economic instability and inflationary pressures. marking it as undervalued.
Macro Tail Winds Strengthening Bitcoin
The thread analyzes how current macroeconomic trends, such as the resurgence of inflation and the bearish turn in bond markets, are creating favorable conditions for the growth of Bitcoin. Demeester highlights the global economic debt overhang, which he believes will lead to a shift in spending toward basic economic needs and a flight toward real stores of value, benefiting Bitcoin.
Nation-State Adoption of Bitcoin
Expanding adoption by nation-states, Demeester predicts a stealthy but continued incorporation of Bitcoin into national financial strategies. This includes central banks potentially using Bitcoin to strengthen their balance sheets, indicating growing recognition at the government level of Bitcoin’s utility and value.
According to Adamant’s report, El Salvador may stand out as the exception for a few more years. Nation-state adoption is expected to continue somewhat more stealthily in the coming two years, such as in the form of CBDC’s backed by a collateral pool that includes bitcoin, or by central banks using bitcoin to shore up their impaired balance sheets. Later, as the bull market roars higher, there could be more bitcoin legal tender law announcements.
Bitcoin Investment Strategies
Demeester provides advice for investing in Bitcoin, weighs the merits of lump-sum investing against dollar-cost averaging, and suggests allocation strategies ranging from conservative hedging to a more aggressive retirement strategy.
On the one hand, people who have irregular income or are managing a mature portfolio often lean towards buying a lump-sum investing strategy, which may require extra psychological resilience, as the price can drop after the purchase, and it will be impossible to buy any more dips.
On the other hand, people who have relatively steady employment and who are still building a savings portfolio may want to consider investing in bitcoin via a dollar-cost averaging strategy. This has the benefit of accumulating a growing position over the long run, while possibly experiencing less stress when the price dips as you know that more buys are coming in anyway.
Bitcoin Custody and Security
Demeester discusses the complexities of Bitcoin custody, analyzing the trade-offs between single private key storage, multi-signature self-custody, third-party custodians, and his advocated Collaborative Custody approach, which balances security with control.
In view of Demeester’s analysis and recommendations, it is best to conduct your own research before making financial decisions.
By Audy Castaneda
