Source: The Block
Compiled by: BitpushNews Mary Liu
Since Donald Trump won the 2024 U.S. presidential election on November 5, the price of Bitcoin has reached a historic high in the past week. According to market data, on election night, the price of Bitcoin broke through the previous historical high of $73,730, and as of publication, BTC was trading between $88,000 and $89,000, having briefly reached a high of $90,036.17 that day.
The favorable outcome of Trump's election, the expectation that sovereign nations might follow the U.S. to establish Bitcoin strategic reserves, and the easing of interest rates—how long can the post-election surge of Bitcoin last?
"Don't fight the trend," a Bernstein analyst told clients in a report, "Welcome to the cryptocurrency bull market—buy everything you can buy."
Bernstein and Standard Chartered expect Bitcoin price targets to reach $200,000 by the end of next year, but first, how long will it take for BTC to break through $100,000?
Polymarket users have placed bets on whether this goal will be achieved by the end of 2024, with total trading volume exceeding $3 million today and a betting probability of 59%.
Michael Cahill, CEO of Douro Labs, told The Block: "Bitcoin reaching $100,000 is not a yes or no question, but a matter of time. In my view, it could happen as early as the first quarter of 2025. Given the current macro environment favoring digital assets, we are seeing unprecedented momentum."
Fear, or not fear?
According to Cahill, the post-election rebound is not purely FOMO, but he noted that the current price is not just driven by retail speculation like in 2017.
He said: "The market is finally recognizing Bitcoin as a legitimate asset, a tool to hedge against inflationary pressures. Today, we see a structural shift in investor sentiment towards Bitcoin, and a six-figure price foundation has begun to be established, which could solidify Bitcoin's position as a cornerstone of the global financial system."
Matt Hougan, chief investment officer of Bitwise, stated that since breaking through $74,000, BTC has been waiting for the next trigger point before reaching $100,000, and he believes Bitcoin could 'easily' reach that level before the end of the year.
Hougan stated: "Everyone is focused on new Bitcoin buyers. This is very real, but another reason for this rebound is that people have stopped selling. Long-term holders are no longer willing to sell Bitcoin at current prices, and shorts seem unwilling to stand in the way of this speeding train."
Tides.Network CEO Chandra Duggirala noted that Bitcoin's price could easily reach $100,000 before Thanksgiving, but there are risks in the short term.
Duggirala stated in an email: "We have not seen wealth managers exhibit strong FOMO, while retail investors are just beginning to pay attention. Thus, this trend is still in its nascent stages. We believe that once it breaks through $100,000, true FOMO will arrive."
Zaheer Ebtikar, founder and chief investment officer of Split Capital, expressed the same sentiment.
Ebtikar told The Block: "Historically, people have also been forced to accept the notion that Bitcoin's movements indeed occur when it breaks historical highs, so I think this is a self-fulfilling prophecy, but more importantly... many smarter funds and many crypto natives are preemptively capturing capital that may enter this space in the future."
He pointed out that if people hand funds over to professional asset allocators, it will not happen immediately. Therefore, most of the FOMO might not materialize until December 1, while January 1, 2025, seems more realistic.
Ebtikar said: "I believe we are in a very strange window where a lot of sharp funds capable of quickly mobilizing capital are entering the market, and this happens before more systemic buying enters the market."
How does smart money view this?
Two Prime CEO Alexander Blume stated that by the end of this year, the price of Bitcoin will 'undoubtedly' reach $100,000.
"The implied volatility of BTC is 55," Blume said, "While a bit high, I expect it to reach higher levels before the market peaks. This and the recently re-emerged lending market tell me that there is still some upside potential in the market."
According to CF Benchmarks data, traders appear to be aggressively purchasing Bitcoin call options with a strike price of $100,000. The 30-day constant expiration 25 delta skew has now surpassed the 5 vol threshold (note: 5 vol is an empirical value, and when the skew exceeds this threshold, it is generally considered that the market has strong bullish expectations), the company stated, indicating a significant increase in demand for upward exposure.
Additionally, Thomas Erdösi, head of products at CF Benchmarks, stated in a statement that for far-out-of-the-money call options, such as 5D options with a strike price above $100,000, their implied volatility is significantly higher, indicating that traders are preparing for a further breakthrough of the six-figure mark.
Wintermute data shows that open contracts for December 27 indicate an increased demand for call options with a strike price of $100,000, with a nominal amount expected to reach $850 billion.
By the end of the first quarter of next year, contracts for March 28 show an increase in demand for strike prices between $100,000 and $120,000. The ETH/BTC spot exchange rate has risen by 11% in the past week, marking the third largest increase this year.
Jake Ostrovskis, a Wintermute OTC trader, said: "As pointed out throughout 2024, this price difference has been mitigated at every opportunity. The prevailing view is 'this time is different', which is a dangerous position, and the market has softened since Friday's peak."
Standard Chartered analyst Geoffrey Kendrick stated that before November 29, the level of $90,000 is 'easily achievable', with a target of $100,000 expected by December 27, and $125,000 by the end of the year. He emphasized that December 10 is an important date to watch, as the Microsoft board will vote on whether to invest in BTC.
Kendrick wrote in an email to clients on November 10: "...Many of Trump's trades peaked around the inauguration on January 20 after the 2016 election, so if BTC cannot reach $125,000 by December 31, I believe it will reach that level before January 20."
Matt Klein, a portfolio strategist at Nascent, told The Block: "Bitcoin will reach $100,000 by the latest before the (Trump) inauguration. The only question is whether the Lummis bill is worth serious consideration; if the Lummis bill becomes law, there will be no cap on the increase."
Earlier this year, Senator Cynthia Lummis (R-Wyo) proposed a bill requiring the U.S. Treasury to purchase 1 million Bitcoins within five years to counteract the effects of dollar devaluation. She also proposed a stablecoin bill in April.
With anti-crypto figures like Senator Sherrod Brown losing in the elections, the U.S. Congress will see the most pro-crypto lineup in history. Coupled with Trump’s economic policies potentially devaluing the dollar, Arthur Hayes believes Bitcoin will 'fly higher'.
Hayes said: "As the freely circulating supply of Bitcoin decreases, the most historically abundant fiat currencies will chase a safe haven, not just Americans, but investors globally, including those from China, Japan, and Western Europe, will funnel funds into Bitcoin... This is the reason Bitcoin is heading towards $1 million, as prices are determined by marginal pricing. Buy and hold."
