After a torrid couple of weeks, Bitcoin could surge to $100K by the end of the year, but the path to six figures is not expected to be straightforward.
According to Matt Hougan, Chief Investment Officer at Bitwise, the current price dip for BTC is only a temporary setback for the largest cryptocurrency, hinting at a frenetic dash to $100k before the end of the year. He made his predictions known in a public memo titled “Short-term Pain, Long-Term Gain” to rationalize BTC’s recent price movements.
After trading well above the $60k mark for over two months, BTC slumped to lows of $57K, sparking fears of the start of an extended bear market or a long-term sideways trading pattern. Hougan noted that a bird’s eye view of the ecosystem reveals bright prospects for the future of Bitcoin and altcoins.
“The crypto market is facing a weird dynamic right now,” said Hougan. “All the short-term news is bad, and all the long-term news is good. The dichotomy is creating an incredible potential opportunity for long-term investors.”
For Hougan, the biggest growth indicator lies with spot Bitcoin ETPs, with inflows in the products breaking all existing records following their launch in January. The CIO opines that more inflows in the region of “billions” could make their way into ETPs after large wealth management platforms approve their use by the end of the year.
Although the popular belief is that the BTC halving has been priced in, Hougan argues that the asset has always surged by leaps and bounds in the months following the event. His memo predicts that 2024 will not be any different, and bulls can brace themselves for a rally to take them to six digits by the end of the year.
He buttressed his points by leaning on the government’s changing stance toward cryptocurrencies and the elevation of the topic as a front burner in the lead-up to the US presidential elections. Already, Republican candidate Donald Trump has publicly declared full support for BTC with several pundits noting that his victory at the polls could send asset prices through the roof.
Hougan cites potential rate cuts by the US funds, steady growth rates in stablecoins, and the wading of financial behemoths into the space as reasons for a potential surge to $100K.
A slew of headwinds in BTC’s path
Despite BTC’s upbeat long-term prospects, the asset has to contend with a wave of headwinds that threaten to push prices to new lows. Traders are grappling with the unsavory effects of Mt. Gox distributing over $8 billion worth of BTC to creditors at the start of July and Germany’s sale of a chunk of its BTC holdings.
The timing of the sales, at a period of traditional low liquidity for digital assets, has had an unfavorable effect on prices, but Hougan says it is only a small blip in the grand scheme of things.
“Right now, one-off events are suppressing what I think would otherwise be a raging bull market,” said Hougan. “Once the market digests these short-term liquidity shocks, the future looks bright indeed.”
