Bitcoin (BTC), the largest crypto, is poised for a remarkable surge, according to analysts’ price predictions. A host of factors could propel the Bitcoin price over $100,000 in the 2024-2025 bull run. Hence, here’s a comprehensive look at the 7 reasons why Bitcoin price can hit $100,000 by 2025.
7 Reasons Why Bitcoin Can Hit $100,000
1. Institutional Involvement Through Bitcoin Spot ETFs
Institutional players are actively embracing BTC through Spot Bitcoin ETFs. Currently, 3.3% of the total Bitcoin supply is held in these funds. Moreover, major financial institutions such as BlackRock have been consistently expanding BTC holdings in their ETFs. This influx of institutional capital not only lends credibility to Bitcoin but also injects significant liquidity into the market while enhancing the scarcity, propelling its price up.
2. Bitcoin Price’s Historical Correlation With Halving Events
The Bitcoin price’s historical performance after Halving events is a compelling trend to watch. With only 48 days remaining until the next Halving in 2024, expectations are high. Examining historical data unveils the profound influence of past Halving events on the Bitcoin price. In 2012, following the Halving, Bitcoin’s price catapulted from $12 to an astonishing $1,200.
The 2016 Halving witnessed a surge from $650 to an unprecedented $19,000, marking the peak for Bitcoin price before the onset of the infamous ‘Crypto Winter.’ Similarly, the 2020 Bitcoin Halving triggered a remarkable spike, propelling the price from $9,000 to a record-breaking high of over $68,000. The impending Halving that will reduce mining rewards from 6.25 BTC to 3.125 BTC is anticipated to follow this trend as it will introduce scarcity in the market.
3. Corporate Adoption Driven by FASB Rule
A recent catalyst for Bitcoin’s adoption by corporations is the Financial Accounting Standards Board (FASB) rule. This rule has encouraged companies to incorporate Bitcoin into their reserves, recognizing its properties as a store of value and its potential for long-term growth. As companies diversify their portfolios, Bitcoin is increasingly becoming a strategic asset.
4. Central Banks Adopting Bitcoin To Hedge Fiat Inflation
On the global stage, nations and central banks are turning to Bitcoin as a hedge against inflation and economic uncertainties. El Salvador‘s bold decision to adopt Bitcoin as legal tender exemplifies this trend. Moreover, as traditional fiat currencies face challenges, Bitcoin emerges as a strategic asset for safeguarding against the potential devaluation of national currencies. The increased adoption could definitely help in pushing its value up.
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5. Fed’s Expected Rate Cuts Could Drive Bitcoin Price High
The Federal Reserve is expected to implement rate cuts in June this year. As the Fed rate policy changes, investors are expected to increasingly seek alternative stores of value. Bitcoin, with its decentralized nature and finite supply, stands out as an attractive alternative asset.
It’s because borrowing capital would be cheaper from an investing standpoint. Hence, investors can leverage the opportunity to invest in high-risk assets such as cryptocurrencies. Moreover, Bitcoin being the largest digital currency has acquired significant credibility over time, which could enhance its adoption in case of a Fed rate cut.
6. Bitcoin As Inflation Hedge
Bitcoin’s appeal as a hedge against inflation continues to grow. Not only countries or institutional investors but individual investors are also seeking ways to hedge against inflation. The decentralized nature of Bitcoin and its limited supply make it an attractive option for preserving wealth in the face of inflationary challenges. This would lead to a rise in inflows, positively impacting the BTC price.
7. Bitcoin Price Expected To Mirror Gold’s Action After 2003 ETF Launch
The Bitcoin Spot ETF is expected to inject billions of dollars into the market, mirroring the impact witnessed with Gold. The increased liquidity resulting from the ETF is likely to amplify demand for Bitcoin. This could potentially drive its price to over $100,000 by next year if it echoes the Gold price action in 2003.
On March 28, 2003, the first-ever Gold ETF, Gold Bullion Securities, was launched on the Australian Securities Exchange. At the time, Gold was priced at $330.30 per ounce. Within a year, its value surged to $421.25 oz, suggesting an increase of over 27% year-over-year, according to Bullion by Post. This is significantly higher than current trends as the Gold price gained 13% in 2023.
Moreover, after the launch of the first Gold ETF in the U.S., SPDR Gold Shares, on November 18, 2004, the metal’s price soared to $485 oz within a year, indicating a 10% increase. Though the hike isn’t as significant as in 2004, in the last 20 years, Gold has gained over 400% in value. Furthermore, if Bitcoin price mirrors the impact of the first Gold ETF, it could potentially surge higher, considering its high volatility.
Therefore, a surge over $54,000 is imminent, which represents a 27% increase from the current value of around $43,000. In addition, it could double in value from this level and soar beyond $100,000 as several prominent entities like Standard Chartered have predicted lately. In addition, other factors such as Bitcoin Halving and the Fed rate cut could be invaluable catalysts in driving the rally.
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