Bitcoin
1 Cryptocurrency to Buy Before It Surges 150% in the Second Half of the Year, According to Two Wall Street Analysts
Another major upward move could be in the cards for this popular cryptocurrency.
The cryptocurrency market is notoriously volatile. This can lead to some impressive drops in value, but it can also produce some incredible returns in a short space of time.
Bitcoin (BTC -6.55%) hit a new all-time high earlier this year amid the fervor of new spot prices Bitcoin ETFs hitting the market. The largest cryptocurrency on the market has seen its value increase 177% from its October lows to its March high of $73,750. It has since retreated to around $60,000 per Bitcoin at the time of writing.
Two Wall Street analysts think Bitcoin could be poised for another price surge in the next six months, reaching $150,000 by the end of 2024, a 150% increase. Fundstrat’s Tom Lee and Standard Chartered’s Geoff Kendrick expect the cryptocurrency to surpass its all-time highs later this year.
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Bitcoin’s latest challenge is almost behind us
The price of Bitcoin is primarily determined by supply and demand. Earlier this year, the Bitcoin Halving has slowed the rate at which the cryptocurrency’s supply is increasing. Previous halvings have been bullish for Bitcoin, as demand growth outpaces supply growth. However, another large supply influx remains a challenge for Bitcoin’s price.
Just days after the most recent Bitcoin halving, defunct Bitcoin exchange Mt. Gox, which filed for bankruptcy protection in 2014, has delivered some good news for creditors. Mt. Gox was once the largest Bitcoin exchange in the world, but suffered a devastating hack in 2014, resulting in the loss of over 850,000 Bitcoin. In April, Mt. Gox’s administrator said it would begin returning some of the lost funds by October.
In late June, the trustee announced plans to begin disbursements in July. Two years ago, the Mt. Gox trustee held 142,000 Bitcoin, worth over $8.5 billion at today’s prices. If the creditors who received their Bitcoins decide to sell, it could put massive downward pressure on the price of Bitcoin. This potential selling pressure has been baked into the price of Bitcoin in recent months.
But demand for Bitcoin is largely based on future expectations. And the Mt. Gox deal is almost over. Lee says that’s a reason to invest in Bitcoin now. “This has been a huge glut for many years,” he said in an interview with CNBC. “But if I were investing in crypto, knowing that one of the biggest gluts is going to disappear in July, I think that’s a reason to actually expect a pretty sharp recovery in the second half of the year.” He says $150,000 per Bitcoin is still possible by the end of the year.
Kendrick believes that macro events like the US election could play a significant role in Bitcoin’s price later this year. He sees a scenario where the cryptocurrency hits $100,000 on Election Day and $150,000 by the end of the year.
This Major Source of Demand Will Drive Bitcoin Higher
The biggest potential driver of Bitcoin’s long-term price appreciation is the asset’s growing adoption in institutional portfolios.
New spot Bitcoin ETFs approved in January will usher in a new, easier way to institutional investors to invest in cryptocurrency. Many hedge fund managers jumped at the opportunity. They had $4.2 billion invested in the Grayscale Bitcoin Background (GBTC -6.54%) and another 3.2 billion dollars in the iShares Bitcoin Investment Fund (I BITE -6.50%), through the end of the first quarter, according to SEC filings.
Inflows into Bitcoin ETFs slowed in the second quarter, but the potential for broader adoption among institutional investors remains. Cathie Wood’s Ark Invest expects Bitcoin to play a larger role in institutional investors’ portfolios in the future. The analysts estimate that a 1% allocation of investable assets to Bitcoin will push the cryptocurrency’s price to $120,000, but they see potential for a much larger allocation.
As more institutions increase demand and supply growth continues to slow, there’s plenty of room for Bitcoin’s price to rise. Whether it will hit $150,000 by the end of the year is hard to say. But the cryptocurrency has a history of making big moves in a short space of time. If you’re bullish on Bitcoin, the best time to invest is now.
Adam Levy has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.