Bitcoin (BTC) is the largest cryptocurrency and analysts predict it will experience a significant surge in the coming years. With several factors at play, Bitcoin’s price is expected to surpass $100,000 by 2025. Here are seven reasons why this may happen.
1. Institutional Investment Through Bitcoin Spot ETFs
Institutional players have been actively investing in BTC through Spot Bitcoin ETFs, with 3.3% of the total Bitcoin supply currently held in these funds. Major financial institutions like BlackRock have also been increasing their BTC holdings in ETFs. This influx of institutional capital not only adds credibility to Bitcoin, but also increases liquidity and scarcity, pushing its price higher.
2. Historical Correlation of Bitcoin Price with Halving Events
The historical performance of Bitcoin’s price after Halving events is a strong trend to watch. With the next Halving expected in 2024, there is high anticipation for a surge. Looking at past data, we can see the significant impact of Halving events on Bitcoin’s price. In 2012, after the Halving, Bitcoin’s price skyrocketed from $12 to $1,200. Similarly, after the 2016 Halving, the price surged from $650 to a record high of $19,000. The upcoming Halving, which will decrease mining rewards, is expected to continue this trend by creating scarcity in the market.
3. Corporate Adoption Driven by FASB Rule
The recent FASB rule has encouraged companies to include Bitcoin in their reserves, recognizing its potential as a store of value and long-term growth. As more companies diversify their portfolios, Bitcoin is becoming a strategic asset.
4. Central Banks Turning to Bitcoin to Hedge Against Fiat Inflation
On a global scale, nations and central banks are adopting Bitcoin as a hedge against inflation and economic uncertainties. El Salvador’s decision to make Bitcoin legal tender is a prime example. As traditional fiat currencies face challenges, Bitcoin is seen as a safe asset for protecting against potential devaluation.
5. Fed’s Expected Rate Cuts Could Boost Bitcoin Price
The Federal Reserve is expected to implement rate cuts in June, leading investors to seek alternative assets. Bitcoin, with its decentralized nature and limited supply, stands out as an attractive option. This could also make it easier for investors to borrow capital and invest in high-risk assets like cryptocurrencies. Bitcoin’s credibility can also increase as a result of a Fed rate cut.
6. Bitcoin as a Hedge Against Inflation
Bitcoin’s appeal as a hedge against inflation continues to grow. Not only countries and institutional investors, but individual investors are also looking for protection against inflation. With its decentralized nature and limited supply, Bitcoin is an attractive option for preserving wealth in the face of inflation.
7. Bitcoin’s Price Expected to Follow Gold’s Action After 2003 ETF Launch
The launch of the first Gold ETF in 2003 had a significant impact on the metal’s price, with a 27% increase in the first year. Similarly, after the launch of the first Gold ETF in the US in 2004, the price increased by 10% within a year. If Bitcoin follows a similar trend after the launch of its first Spot ETF, it could potentially reach over $100,000 due to its high volatility.
In conclusion, with the factors such as institutional investment, Halving events, corporate adoption, central bank adoption, Fed rate cuts, and its appeal as an inflation hedge, Bitcoin’s price is expected to surpass $100,000 by 2025.
