Bitcoin (BTC), the largest cryptocurrency, is poised for an impressive surge, according to analyst price predictions. Due to a number of factors, the 2024-2025 bull market could see Bitcoin price surpass $100,000. So, here we take a comprehensive look at 7 reasons why Bitcoin price could reach $100,000 by 2025.
7 reasons why Bitcoin will reach $100,000
1. Institutional Investor Involvement through Bitcoin Spot ETF
Institutional investors are actively embracing BTC through Spot Bitcoin ETFs. Currently, his 3.3% of the total Bitcoin supply is held in these funds. Furthermore, major financial institutions such as BlackRock are continually increasing their BTC holdings in their ETFs. This influx of institutional capital not only lends credibility to Bitcoin, but also injects massive amounts of liquidity into the market while increasing scarcity, driving up the price.
2. Historical correlation between Bitcoin price and halving event
The historical performance of Bitcoin price after the halving event is a trend to watch. With 48 days left until the next halving in 2024, expectations are high. Examining historical data reveals the significant impact that past halving events have had on Bitcoin price. In 2012, after the halving, the price of Bitcoin skyrocketed from $12 to $1,200.
The 2016 halving saw a spike from $650 to an unprecedented $19,000, marking the peak of Bitcoin prices before the infamous “crypto winter” began. Similarly, the 2020 Bitcoin halving caused a notable spike, pushing the price from $9,000 to an all-time high of over $68,000. The impending halving, which will reduce mining rewards from 6.25 BTC to 3.125 BTC, is expected to continue this trend as it will bring scarcity to the market.
3. Corporate implementation under FASB rules
The latest impetus for corporate adoption of Bitcoin is the Financial Accounting Standards Board (FASB) rules. This regulation encouraged companies to recognize Bitcoin’s store of value and long-term growth potential and incorporate it into their reserves. Bitcoin is increasingly becoming a strategic asset as companies diversify their portfolios.
4. Central banks embrace Bitcoin to hedge against fiat inflation
On the world stage, countries and central banks are turning to Bitcoin as a hedge against inflation and economic uncertainty. El Salvador’s bold decision to adopt Bitcoin as its legal tender exemplifies this trend. Additionally, as traditional fiat currencies face challenges, Bitcoin has emerged as a strategic asset to protect against potential devaluations of national currencies. Increased adoption could definitely help increase its value.
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5. Expected Fed interest rate cuts could push Bitcoin prices higher
The Fed is expected to cut interest rates in June of this year. As the Fed’s interest rate policy changes, investors are expected to increasingly seek alternative stores of value. Bitcoin stands out as an attractive alternative asset due to its decentralized nature and finite supply.
From an investment perspective, it is cheaper to borrow funds. Therefore, investors can take advantage of the opportunity to invest in high-risk assets such as cryptocurrencies. Additionally, Bitcoin, the largest digital currency, has gained a lot of trust over time, which could strengthen its adoption if the Fed lowers interest rates.
6. Bitcoin as an inflation hedge
Bitcoin’s appeal as a hedge against inflation continues to grow. In addition to national and institutional investors, individual investors are also looking for ways to hedge against inflation. Bitcoin’s decentralized nature and limited supply make it an attractive option for preserving wealth in the face of inflationary challenges. This will lead to increased inflows and have a positive impact on BTC price.
7. Bitcoin price is expected to reflect the movement of gold since the ETF was launched in 2003
The Bitcoin Spot ETF is expected to inject billions of dollars into the market, mirroring the impact witnessed in gold. Increased liquidity from ETFs could increase demand for Bitcoin. This could push the price above $100,000 by next year if gold’s price trend in 2003 is the same.
On 28 March 2003, the first ever gold ETF, Gold Bullion Securities, was launched on the Australian Stock Exchange. At the time, the price of gold was $330.30 per ounce. Within a year, its value had soared to 421.25 ounces, suggesting an increase of more than 27% year-on-year, according to Bullion Buy Post. Gold prices in 2023 rose by 13%, which is significantly higher than the current trend.
Furthermore, after the launch of the first U.S. gold ETF, SPDR Gold Shares, on November 18, 2004, the price of the metal soared to 485 ounces in less than a year, representing a 10% increase. Although not as dramatic a rise as it was in 2004, over the past 20 years the value of gold has increased more than 400%. Moreover, if Bitcoin price reflects the impact of the first gold ETF, the price could rise even higher given its high volatility.
Therefore, an appreciation of more than $54,000 is imminent, representing a 27% increase from its current value of approximately $43,000. Moreover, its value could double from this level and soar to over $100,000, as some prominent companies such as Standard Chartered have recently predicted. Additionally, other factors such as the Bitcoin halving and Fed rate cuts could also be valuable catalysts for the rally.
Also read: Bitcoin ETF records 32,000 BTC inflows amid big move for whale wallets