American financial giant Citibank is cutting back its operations in India. Photo: AFP

Bitcoin’s price could soar to hundreds of thousands of dollars next year, according to a major American bank.

A recent technical analysis report that CitiFX is said to have issued to its institutional clients says it could reach an astronomical $318,000 sometime in December 2021 and could continue even higher in 2022.

In a leaked note to clients examined by Twitter commentator Alex on November 14, Citibank executive Tom Fitzpatrick examines the long-term trend of bitcoin’s price, which he says has been characterized by “unthinkable rallies followed by painful corrections.”

Notably, the three major bullish periods of BTC so far have been increasing in length. Initially, there was a 10-month run from 2010–2011, followed by a two-year run from 2011–2013, and finally a three-year run covering 2015–2017, Cointelegraph reports.

Conversely, Fitzpatrick, who is the global head of the company’s CitiFXTechnicals market insight product, says the period of correction following the last two bull runs has remained stable at around 12 months.

According to the bank’s analysis, this means the crypto is right in the middle of a bull run that began in early 2019 and could run for four years until late 2022.

An extended bull run of that magnitude would arguably lead to even higher prices, and charting “what looks like a very well defined channel” over the past seven years gives Fitzpatrick his prediction of a $318,000 bitcoin price in December 2021.

While acknowledging that it is an improbably high number, he stressed that it “would only be a low to high rally of 102 times (the weakest rally so far in percentage terms) at a point where the arguments in favor of bitcoin could well be at their most persuasive ever.”

One of the arguments he was referring to was the US Federal Reserve’s policy of expanding the money supply to address the economic impact of the Covid-19 crisis, which many observers believe will lead to significant currency devaluation, a development that is expected to drive investors toward scarce assets.

Fitzgerald pointed to bitcoin’s 2010-11 “exponential move” as being “very reminiscent” of the 1970s gold market. Gold had experienced 50 years of a constricted $20-$35 price range before a breakout occurred after a change in fiscal policy by the Nixon administration in 1971, reports.

Citibank’s price prediction was met with enthusiasm on Twitter.

Tyler Winklevoss of the Gemini exchange tweeted, “CitiBank report predicts #Bitcoin price of 318K by December 2021. Buckle up!”

And YouTubers were equally enthusiastic.

YouTube video