Bitcoin
Is Bitcoin on Track to Hit $100,000 by 2025?
Investors are focused on this important price target.
Bitcoin (BTC -1.13%) has had an interesting year. From the start of 2024 to its all-time high on March 14, Bitcoin jumped 73%. But it’s been a pretty shaky four months since then. Bitcoin has had a good run in the past few weeks, but it’s currently down 12% from its peak price (on July 18).
The bulls are hoping that a breakout can happen. With that said, it is the world’s leading cryptocurrency on track to hit $100,000 sometime in 2025, setting a new record and breaking the psychologically important six-figure mark? Let’s see if this 52% gain (from today’s price) is a possibility.
Multiple catalysts
Less than two years ago, in late 2022, Bitcoin’s price was below $16,000. That year was a tough one for risk assets, a category that cryptocurrencies and stocks fall into. But it’s been remarkable to see Bitcoin’s rise since then.
The leading digital asset can thank a few recent catalysts for its performance. The most notable this year was the approval of the Securities and Exchange Commission (SEC) in spot bitcoin exchange-traded funds (ETFs). This highly anticipated event essentially legitimized Bitcoin on both Wall Street and Washington. And it opened the floodgates for much more capital to flow into the asset in a convenient and compliant manner.
Another catalyst was the April halving which cut the new supply of Bitcoin entering the market in half. This happens roughly every four years as it reinforces Bitcoin’s fixed issuance schedule. The digital asset typically experiences a massive bull run in the months that follow.
I believe that broader acceptance of Bitcoin is another step in the right direction. For example, during this year’s election cycle, politicians are starting to make Bitcoin more specifically, and crypto more broadly, a major issue.
The possibility of interest rate cuts could also boost Bitcoin’s price. This is because investors will start accepting more risk in order to earn a higher return. And given Bitcoin’s impressive track record, demand for it could increase if the Federal Reserve becomes more accommodative.
Previous cycles
I noted above that after a halving event occurs, the price of Bitcoin typically rises rapidly in the 12 to 18 months or so afterward. Of course, it’s not surprising that as the asset has matured, this bull run hasn’t been as spectacular as previous ones.
For example, in the 17 months following the July 2016 halving, the price soared 2,890%. And in the 18 months following the May 2020 halving, the price of Bitcoin soared nearly eightfold.
Therefore, it’s safe to assume that Bitcoin’s price will increase at a more moderate pace. Seeing it increase by 52% by the end of next year, however, seems like an entirely realistic scenario that fits with the trend of smoothing post-halving returns.
Keep this in mind
While I believe it’s entirely possible that Bitcoin will hit $100,000 next year, it’s important to understand that short-term projections are often wrong. Worse still, they provide a false sense of accuracy that can ultimately result in poor investment decisions. Consequently, you shouldn’t buy Bitcoin with a 12- or 24-month outlook, expecting a big gain in 2025. A healthier investment horizon would be several years into the future.
Instead, it’s always better to keep a long-term mindset. This will force you to focus on what matters, like the fact that Bitcoin has a hard supply cap and that it is a decentralized digital currency not controlled by any single entity. If these characteristics resonate with you, you can buy this cryptocurrency with a time horizon spanning at least five years.
Neil Patel and its clients have no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
Bitcoin
Bitcoin (BTC), Stocks Bleed as China’s Surprise Rate Cut Signals Panic, Treasury Yield Curve Steepens
Risk assets fell on Thursday as China’s second rate cut in a week raised concerns of instability in the world’s second-largest economy.
Bitcoin (BTC)the leading cryptocurrency by market cap, is down nearly 2% since midnight UTC to around $64,000 and ether (ETH) fell more than 5%, dragging the broader altcoin market lower. The CoinDesk 20 Index (CD20), a measure of the broader cryptocurrency market, lost 4.6% in 24 hours.
In equity markets, Germany’s DAX, France’s CAC and the euro zone’s Euro Stoxx 50 all fell more than 1.5%, and futures linked to the tech-heavy Nasdaq 100 were down slightly after the index’s 3% drop on Wednesday, according to the data source. Investing.com.
On Thursday morning, the People’s Bank of China (PBoC) announced a surprise, cut outside the schedule in its one-year medium-term lending rate to 2.3% from 2.5%, injecting 200 billion yuan ($27.5 billion) of liquidity into the market. That is the biggest reduction since 2020.
The movement, together with similar reductions in other lending rates earlier this week shows the urgency among policymakers to sustain growth after their recent third plenary offered little hope of a boost. Data released earlier this month showed China’s economy expanded 4.7% in the second quarter at an annualized pace, much weaker than the 5.1% estimated and slower than the 5.3% in the first quarter.
“Equity futures are flat after yesterday’s bloody session that shook sentiment across asset classes,” Ilan Solot, senior global strategist at Marex Solutions, said in a note shared with CoinDesk. “The PBoC’s decision to cut rates in a surprise move has only added to the sense of panic.” Marex Solutions, a division of global financial platform Marex, specializes in creating and distributing custom derivatives products and issuing structured products tied to cryptocurrencies.
Solot noted the continued “steepening of the US Treasury yield curve” as a threat to risk assets including cryptocurrencies, echoing CoinDesk Reports since the beginning of this month.
The yield curve steepens when the difference between longer-duration and shorter-duration bond yields widens. This month, the spread between 10-year and two-year Treasury yields widened by 20 basis points to -0.12 basis points (bps), mainly due to stickier 10-year yields.
“For me, the biggest concern is the shape of the US yield curve, which continues to steepen. The 2- and 10-year curve is not only -12 bps inverted, compared to -50 bps last month. The recent moves have been led by the rise in back-end [10y] yields and lower-than-expected decline in yields,” Solot said.
That’s a sign that markets expect the Fed to cut rates but see tighter inflation and expansionary fiscal policy as growing risks, Solot said.
Bitcoin
How systematic approaches reduce investor risk
Low liquidity, regulatory uncertainty and speculative behavior contribute to inefficiency in crypto markets. But systematic approaches, including momentum indices, can reduce risks for investors, says Gregory Mall, head of investment solutions at AMINA Bank.
Low liquidity, regulatory uncertainty and speculative behavior contribute to inefficiency in crypto markets. But systematic approaches, including momentum indices, can reduce risks for investors, says Gregory Mall, head of investment solutions at AMINA Bank.
Low liquidity, regulatory uncertainty and speculative behavior contribute to inefficiency in crypto markets. But systematic approaches, including momentum indices, can reduce risks for investors, says Gregory Mall, head of investment solutions at AMINA Bank.
July 24, 2024, 5:30 p.m.
Updated July 24, 2024, 5:35 p.m.
(Benjamin Cheng/Unsplash)
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Bitcoin
India to Release Crypto Policy Position by September After Consultations with Stakeholders: Report
“The policy position is how one consults with relevant stakeholders, so it’s to go out in public and say here’s a discussion paper, these are the issues and then stakeholders will give their views,” said Seth, who is the Secretary for Economic Affairs. “A cross-ministerial group is currently looking at a broader policy on cryptocurrencies. We hope to release the discussion paper before September.”
Bitcoin
Bitcoin (BTC), Ether (ETH) slide as risk aversion spreads to crypto markets
Ether, the second-largest token, fueled a slide in digital assets after a stock rout spread unease across global markets.
Ether fell about 6%, the most in three weeks, and was trading at $3,188 as of 6:45 a.m. Thursday in London. Market leader Bitcoin fell about 3% to $64,260.
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