Bitcoin forecast to break US$80,000 barrier by year-end
Cryptocurrency prices, particularly Bitcoin, have experienced an unexpected surge this year. The world’s largest cryptocurrency exchange, Binance’s chief executive, Richard Teng, previously predicted Bitcoin would conclude 2024 at approximately US$80,000. However, current market trends indicate that Bitcoin could surpass that figure before the year ends.
Bitcoin’s popularity has been on the rise, reaching an all-time high of US$73,750 in mid-March. This represents a 56% increase since the start of the year, outperforming its 2021 peak of US$68,000. Despite a significant drop in value following the unsettling reports of high US inflation in February, Bitcoin managed to rebound, with its price exceeding US$70,000 for the first time in over a week.
The phenomenal rise in Bitcoin prices can be attributed to several factors. The launch of spot Bitcoin exchange-traded funds (ETFs) earlier this year led to a 350% surge in prices, recovering from a slump to US$15,000. The US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs on January 10, 2024, marking a significant shift in regulatory attitudes towards cryptocurrency.
The approval of spot Bitcoin ETFs had two significant impacts. Firstly, it enhanced the legitimacy of the asset class as the traditionally cautious SEC eased regulatory constraints. Secondly, the ETFs altered the supply and demand dynamics as providers had to purchase physical Bitcoin to offer the product.
Other jurisdictions are also considering the approval of similar products. Furthermore, the Bitcoin halving event, which happens roughly every four years, is anticipated to boost prices. The halving event reduces the volume of new Bitcoin entering the market, limiting the incentive for miners.
According to Suphasit Sitthisaovapark, head of product development and investment strategy at Asset Plus Fund Management, investors have purchased 5% of total Bitcoin supplies since the launch of spot Bitcoin ETFs in January. The upcoming halving event next month could trigger supply shocks.
Bitcoin prices
Political factors could also play a role in the rise of Bitcoin prices. If the Republican Party, considered supportive of digital assets, wins the upcoming US presidential election, Bitcoin prices could receive an additional boost.
The macroeconomic backdrop is also encouraging for Bitcoin. Bitcoin prices could benefit from the anticipated interest rate cuts in the US. Unlike the previous record high in November 2021, the current rally is taking place despite positive real yields.
Market expectations for three rate cuts by the Federal Reserve this year provide a favourable environment for Bitcoin. A quicker or deeper cutting cycle could be a bullish driver for the asset.
The future trajectory of Bitcoin prices remains uncertain. However, research from 10x Research suggests that the recent surge is a positive sign. The current uptrend is supported by several central banks adopting dovish stances.
Sanjay Popli, chief executive of Cryptomind Advisory, predicts prices could reach between US$100,000 and US$150,000 during the second and fourth quarters of 2025. Robert Kiyosaki, an entrepreneur and author, predicts a Bitcoin price of US$100,000 by September 2024, reported Bangkok Post.
In conclusion, the rise in Bitcoin prices can be attributed to a combination of regulatory shifts, market dynamics, and political factors. As the market continues to evolve, investors need to stay informed and consider their options carefully.
