Bitcoin is on the cusp of hitting a new all-time high.
That’s the conclusion of market watchers who predict that the price will skyrocket between $80,000 and $125,000 by the end of 2024.
A mixture of macroeconomic factors will drive the world’s leading cryptocurrency to new heights, they say.
“We’re shaping up for one monster rally into year-end and beyond,” David Brickell, head of international distribution at FRNT Financial, and former forex trader Chris Mills wrote in their blog on Monday.
So what are the factors expected to influence the price?
The US election
US voters will choose between Donald Trump and Kamala Harris next week. Their choice will set the tone for the next four years when it comes to everything from abortion to inflation.
It will also determine how high Bitcoin will soar, according to several analysts.
Their predictions consider that Trump has come out as a staunch supporter of the crypto industry while Harris has been more cautious in her support.
In September, Bernstein analysts predicted that Bitcoin’s price would surge to $90,000 this year if Trump grabs the Oval Office, but it would fall as low as $30,000 if Harris is elected.
Last week, Standard Chartered said Bitcoin’s price will soar to $75,000 this year if Harris wins and up to $125,000 if Trump wins.
China
China could also play a role in determining Bitcoin’s future.
Last month, China announced a massive $284 billion stimulus package in an aggressive bid to spur economic growth.
Nikolay Karpenko, director at institutional crypto liquidity provider B2C2, said China’s economic policies can have a notable effect on global liquidity conditions.
Crypto thrives in an excess of liquidity as seen during the quantitative easing of the Covid-era.
Investors have looked to China’s aggressive economic stimulus package plans as a reason to be optimistic about Bitcoin.
“If Beijing announces more aggressive fiscal measures, particularly with regard to infrastructure and liquidity support, we could see renewed upside pressure on Bitcoin, as it benefits from increased risk appetite,” Karpenko told DL News.
Institutional buying
Karpenko also said interest from big money players in Bitcoin via exchange-traded funds and futures will push prices higher.
Record inflows in the space will be crucial to sustain “the current bullish momentum,” Karpenko told DL News.
Bitcoin ETF inflows in the US have topped $3 billion in the last two weeks, according to data from UK crypto fund Farside Investors.
That massive investment inflow has driven the cumulative US spot Bitcoin ETF flow to $22 billion since the SEC approved the investment vehicles in January.
Swelling whale pod
Whale activity is also on the rise, according to CEX.io market research analyst Illya Otychenko.
The exchange defined whales as investors who own a significant amount of crypto, in this case 1,000 Bitcoin.
Otychenko says the number of whale accounts is hitting levels not seen since 2021.
That matters because the last time those numbers rose, it “preceded bullish rallies” in 2016 and 2020, he wrote.
Growing risk appetite
Otychenko has noted a sharp spike in leverage ratios for Bitcoin futures, reaching levels not seen since August 2023.
Leverage ratios in futures trading indicate the level of exposure of a trader’s position. It measures how much a user’s trade size is magnified compared to the underlying margin collateral deposited with the broker.
Large leverage ratios indicate speculative optimism among users which corresponds to a growing risk appetite.
CEX.io analysts, however, say the trend creates room for “sharp liquidation cascades.”
Given Bitcoin’s volatility even during a bullish run-up, traders who bet with large leverage ratios risk massive liquidations.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
