Excluding 2022, every October since 2020 has seen Bitcoin’s price swing by more than 27% from the beginning of the month to the end. Over the past decade, Bitcoin has averaged a gain of just over 21% in October, earning it the nickname Uptober. November typically follows with an average gain of even larger 46%.
Year-to-date, Bitcoin is up 42%, significantly less than Michael Saylor’s MicroStrategy Incorporated (NASDAQ:MSTR), which returned 143% of the value to shareholders of the Bitcoin-exposed primary proxy stock. Over the past three months, Bitcoin has been largely sideways, averaging $62.4K, and is currently trading at $62K.
However, there are reasons to believe that this is the starting point for new Bitcoin highs in 2025. Let's examine them closely.
End of major selling pressure
Over the past month, around 959,000 Bitcoin have moved into net long (LTH) positions. This means that more Bitcoin holders are becoming bullish on Bitcoin’s future, which effectively means that there are fewer Bitcoins to buy out of the total 21 million Bitcoin.
Currently, 94.1% of the Bitcoin supply is available. These LTH spikes are usually followed by Bitcoin price spikes.
Moreover, Bitcoin’s inflation rate is now 0.84% after the fourth halving of miner rewards in April. This is already well below the Federal Reserve’s ideal inflation target of 2%. In contrast, Bitcoin offers a cushion against wealth erosion for two main reasons:
Bitcoin does not suffer from false scarcity, unlike gold with newly discovered veins adding to the supply.
Bitcoin is easy to hold as a digital asset, yet this virtual nature is secured by a vast network of hardware assets and the computing power needed for Bitcoin's proof-of-work algorithm.
While these fundamentals make bitcoin holders optimistic in the long term, there are some caveats. In the early history of bitcoin, when the currency was new and its valuation was fluid, “a lot of bitcoin was lost.” In 2024, this led to the confiscation of €2.6 billion worth of 50,000 bitcoins sold by the German state of Saxony.
Further selling pressure began in July when the Mt. Gox hack payments, which consisted of around 60,000 BTC, began. However, both instances of selling pressure demonstrated Bitcoin’s resilience, leading to a sideways movement.
After 2024, Bitcoin miners will face major selling pressure due to the halving of Bitcoin rewards from 6.25 to 3.125 BTC, forcing Bitcoin mining companies to up their game or go bankrupt. However, according to a CoinShares report, the survival time of Bitcoin mining companies (the days that mining companies will live on reserves) is not that short.
Only if Bitcoin drops below $40,000 and stays there for some time would this trigger significant selling pressure from bankruptcies, as happened with Core Scientific (NASDAQ:CORZ). However, in such a scenario, the Bitcoin mining difficulty would reset after two weeks, setting a new lower baseline for profitability.
Furthermore, the perception of Bitcoin as an asset has matured considerably, making this scenario less likely.
The Newly Minted Bitcoin's Status as a Legitimate Financial Asset
It’s safe to say that 2024 was a milestone year for Bitcoin, as it emerged from the realm of shadowy money into the realm of respectability. The best example of this was BlackRock Inc. (NYSE:BLK) CEO Larry Fink’s candid admission that “my opinion five years ago was wrong” when he called Bitcoin a “money laundering indicator.”
Now, Fink believes that bitcoin is “an asset class that protects you.” Of course, with the SEC approving bitcoin ETFs, the BlackRock CEO will have an incentive to dramatically change his position.
Ultimately, BlackRock’s iShares Bitcoin Trust (NASDAQ:IBIT) has been the main beneficiary of bitcoin’s newfound status as a mainstream asset. It holds $17.24 billion worth of bitcoin, followed by Grayscale Bitcoin Trust (BTC) (NYSE:GBTC) with $14.03 billion and Fidelity Wise Origin Bitcoin Fund (NYSE:FBTC) with $9.9 billion.
In total, these funds have amassed nearly $60 billion in capital inflows, with the three largest Bitcoin ETFs now holding 765,973 BTC. This trend is likely to continue to accelerate, considering that the Congressional Budget Office (CBO) projects that the Old Age and Survivors Insurance Trust Fund will be depleted by 2033.
As of September 2024, the rolling 12-month budget deficit has reached $2.1 trillion, raising the possibility that the Fed will once again ramp up its proverbial money-printing machine to monetize massive debt.
This would make Bitcoin more attractive as a decentralized asset that is not dependent on quarterly earnings reports.
Bitcoin Price Prediction 2024 and Beyond
Taking historical data into account, Bitcoin price moves to all-time highs within 12 to 18 months after a halving event. Bitcoin reached its all-time high of $73.7K on March 14, seven months ago.
With the big sell-off over and Bitcoin hitting new all-time highs, it’s fair to expect the price of Bitcoin to surpass that high. Cryptocurrency market analyst Michael van de Poppe predicts that Bitcoin will trade between $90,000 and $100,000 by the end of the year.
Michael Saylor’s latest Bitcoin acquisition at an average price of $61,740 is approaching the current price of $62,000, suggesting that this is a key resistance level for Bitcoin. In a July VanEck report, the investment management firm forecasted Bitcoin to reach $2.9 million by 2050 as a baseline based on international monetary trends.
Michael Saylor’s report is expected to be more optimistic, putting the price of Bitcoin at around $13 million per bitcoin in the next 21 years. In March, Standard Chartered raised its Bitcoin price forecast from $100,000 to $150,000 by the end of 2024.
The November presidential election is likely to have removed much of this uncertainty. If former President Donald Trump wins a second term, Bitcoin should see a price breakout. While Trump sees Bitcoin as a strategic asset to hold, the other side is more focused on heavier taxes and more government spending.
In both scenarios, this would push the value of Bitcoin past its current ceiling.
***$BTC
