Original source: 0xjs, Golden Finance
Reprinted: Koala, Mars Finance
Bitcoin needs three factors to hit a new all-time high in 2024; one more factor could accelerate Bitcoin's development.
I'm often asked to predict prices. Sometimes I even give predictions. For example, late last year we predicted that Bitcoin would double by 2024 and trade above $80,000.
I still think that’s true.
But price predictions are conditional. They depend on what’s happening in the world. With that in mind, I think the following conditions need to be met for my Bitcoin price prediction of $80,000 to come true:
The good news is that there aren’t many conditions.
Conditions for Bitcoin to rise to $80,000
1. Election: As long as the Democratic Party does not win a landslide victory
The US election is huge for cryptocurrencies. Most people think of it as a binary outcome: Trump = good, Harris = bad.
There is no doubt that a Republican victory bodes well for crypto, given the strong Republican support for crypto. I think the situation on the Democratic side is more nuanced.
The Democratic Party’s views on cryptocurrencies vary widely, from the “anti-crypto brigade” of Sen. Elizabeth Warren (D-Mass.) to strong support from Rep. Ritchie Torres (D-NY). The problem over the past four years has been that the Warren faction has controlled policy and agency appointments, which has created a hostile environment for the industry.
Bitcoin doesn’t need politicians to thrive. It just needs the politicians to walk away. I doubt they will unless the Democrats sweep both houses of Congress and the White House, at which point they will take a more neutral approach to the industry.
You can already see Democrats’ capitulation to this reality in comments from Rep. Maxine Waters (D-Calif.), the top Democrat on the House Financial Services Committee, who recently said, “Cryptocurrencies are inevitable.”
I think this attitude is enough to get us to $80,000 in Bitcoin. (It’s worth noting that Polymarket currently gives the chance of a Democratic sweep at 20%.)
Polymarket Forecast: Balance of Power After the 2024 Election
Source: Bitwise Asset Management, data from Polymarket. Data as of October 8, 2024.
2. Economy: Two rate cuts + continuous global stimulus measures
The number one reason people are attracted to Bitcoin is simple: you don’t trust the government and its currency. This idea gave rise to Bitcoin in 2008 and remains a powerful driving force for cryptocurrency today. It’s so widely accepted that even BlackRock uses it in its marketing pitch for Bitcoin.
That’s why cryptocurrencies rallied after the Federal Reserve cut interest rates by 50 basis points despite a growing U.S. economy, and why they surged after China unveiled a 2 trillion yuan economic stimulus package in late September.
The market is hungry for more stimulus. The market currently expects the Federal Reserve to further ease policy by 50 basis points by the end of the year, and China will also launch more fiscal stimulus measures.
If both of these are achieved, I suspect we will see a Q4 rebound. If not, I think disappointment could weigh on the market.
3. Cryptocurrency: No major negative surprises
The last thing we need to achieve a new high of $80,000 is to ensure that there is no major surprise period. No major hacks. No massive new lawsuits. No previously locked up tokens suddenly entering the market.
Unfortunately, the history of cryptocurrencies is littered with countless such surprises. Over the past few quarters, we have been in a range-bound state as previously locked-up Bitcoin was released from bankrupt exchange Mt. Gox and government vaults.
If we can make it through the end of this year without a similar shock, I expect new all-time highs and beyond.
How else can I help? Altcoins
Some Bitcoin users will probably hate me for saying this, but I think a broader rally in cryptocurrencies will help this prediction pan out.
To be clear: Bitcoin does not need Ethereum, Solana, or a new breed of altcoins for its long-term success. In fact, it is often hurt by shenanigans in the altcoin space. But if we are to achieve a near-term rally across the board — say, to $100,000 in just a few months — it would help to have some pro-crypto sentiment sweeping the market.
The last period of prolonged volatility I recall for Bitcoin was from June 2019 to June 2020, when Bitcoin traded in a tight range between $8,000 and $10,000 (except for a brief dip during the COVID-19 pandemic). In the late summer of 2020, Bitcoin began to rise and headed straight for $60,000. Much of this was driven by COVID-19 stimulus, but some of it was (for lack of a better word) sentiment. Specifically, the “Summer of DeFi” of 2020 gave investors a reason to get excited about crypto again, and some of those animal spirits spilled over into Bitcoin.
These animal spirits have been scarce outside of Bitcoin this year. But I can almost see them rising in areas like stablecoins, whose AUM is hitting all-time highs; new high-throughput blockchains, where communities are rallying around projects like Sui, Aptos, and Monad; and innovative projects like Babylon, which is figuring out how to let Bitcoin investors earn yield from staking. Strong and sustained momentum in these areas would strengthen the melt-up case.
Conclusion
It’s worth remembering that Bitcoin has already performed quite well this year. It’s one of the best performing assets in the world, up 49%, and it’s had very strong news flow. We’ve seen the launch of a Bitcoin ETF, which has become the best performing ETF of all time. We’ve seen widespread institutional adoption, with 60% of large hedge funds now holding Bitcoin. We’ve also seen Bitcoin enter the mainstream political conversation in a way that would have been unimaginable just a few years ago. Two years ago FTX was imploding and Sam Bankman-Fried was making headlines; today, Larry Fink is on TV talking about Bitcoin taking over the world.
All of this suggests that Bitcoin can reach $80,000 (or more) next year regardless of the news. But if we want to get there by the end of the year, the above playbook may help.
