Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
Except for 2022, the month of October since 2020 has seen Bitcoin’s price swing up over 27% from the beginning to the end of the month. Over the last 10 years, Bitcoin gained just over 21% on average in October, earning its moniker Uptober. November typically follows with even greater average gains of 46%.
Year-to-date, Bitcoin price went up 42%, notably lower than Michael Saylor’s MicroStrategy (NASDAQ: MSTR), having returned 143% value to shareholders as the main Bitcoin stock proxy exposure. Over the last three months, BTC price has largely followed sideways action at $62.4k average, currently priced at $62k.
Yet, there are reasons to believe this is a staging phase for new Bitcoin highs going into 2025. Let’s examine them more closely.
The End of Major Suppressive Sell Pressures
Over the last month, ~959k BTC transitioned into a long-term holder (LTH) net position. This means that more holders are bullish on Bitcoin’s future, effectively erecting a wall against sell pressures because there are fewer BTC to buy out of a total of 21 million.
At present, 94.1% of Bitcoin supply is available. Typically, such highs in LTH are followed by a rising BTC price as seen on the chart below.
Image credit: Glassnode
Moreover, the Bitcoin inflation rate is now 0.84% after the 4th halving of miner rewards in April. This is already significantly lower than the Federal Reserve’s ideal inflation target of 2%. In turn, Bitcoin offers a guarantee against the erosion of wealth for two main reasons:
Bitcoin doesn’t have pseudo-scarcity, unlike gold with newly discovered veins adding to the supply.
Bitcoin is easier to hold as a digital asset, yet that virtual nature is secured by a vast network of hardware assets and computing power needed for Bitcoin’s proof-of-work algorithm.
While these underpinnings make Bitcoin holders bullish long-term, there are some caveats. In the early Bitcoin history, when it was novel and its valuation was fluid, much of Bitcoin was “lost.” In 2024, this resulted in €2.6 billion worth of confiscated 50,000 BTC sold by the German state of Saxony.
More selling pressure started in July when Mt. Gox hack repayments started, consisting of around 60,000 BTC. Nonetheless, both selling pressure instances showcased Bitcoin’s resilience, resulting in a sideways action.
Beyond 2024, Bitcoin miners will face main sell pressures due to BTC rewards halving 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 Bitcoin miner runway (the days for miners to survive off reserves) is not that short.
Only if the Bitcoin price falls below $40k and remains so for some time would this cause major selling pressure from bankruptcies, as it happened with Core Scientific (NASDAQ: CORZ). However, in such a scenario, Bitcoin mining difficulty would readjust after two weeks, setting up a new lower baseline for profitability.
Moreover, Bitcoin’s perception as an asset has greatly matured, making that scenario even less likely.
Join our Telegram group and never miss a breaking story.
Bitcoin’s Newly Minted Standing as a Legitmate Financial Asset
It is safe to say that 2024 was the key milestone for Bitcoin, having exited the realm of underground shady money into the realm of respectability. This is best exemplified by BlackRock CEO Larry Fink openly admitting that his “opinion five years ago was wrong” when he dubbed Bitcoin an “index of money laundering.”
Now, Fink believes that Bitcoin “is an asset class that protects you.” Of course, following the SEC’s approval of Bitcoin exchange-traded funds (ETFs), the CEO of BlackRock would have incentives to shift his position so drastically.
After all, BlackRock’s iShares Bitcoin Trust ETF (IBIT) has been the main beneficiary of Bitcoin’s new legitimate status as a mainstream asset. It holds $17.24 billion worth of BTC, followed by Grayscale’s GBTC at $14.03 billion and Fidelity’s FBTC at $9.9 billion.
Altogether, these funds accumulated nearly $60 billion in capital inflows, with the top three BTC ETFs now holding 765,973 BTC. This trend is likely to continue accelerating, considering that the Congressional Budget Office (CBO) projects the exhaustion of funds for the Old-Age and Survivors Insurance Trust Fund by 2033.
As of September 2024, the 12-month rolling budget deficit reached $2.1 trillion, making it even more likely that the Federal Reserve will once again ramp up the proverbial money printing machine to monetize massive debt.
This should make Bitcoin more appealing as a decentralized asset that doesn’t rely on quarterly earnings reports.
Bitcoin Price Forecast for 2024 and Beyond
Taking historical data into account, Bitcoin’s price moves to new all-time highs within 12 to 18 months following a halving event. Bitcoin reached an all-time high of $73.7k on March 14th, seven months ago.
With major selling events over and new Bitcoin in play, it is fair to speculate that Bitcoin’s price will exceed that ATH. Crypto market analyst Michaël van de Poppe forecasts a $90,000 to $100,000 BTC price range by the end of the year.
Michael Saylor’s most recent BTC acquisition at an average price of $61,740 is close to the current $62k price, suggesting this is Bitcoin’s key resistance level. In July’s VanEck report, the investment management firm projected BTC’s price to reach $2.9 million by 2050 as a baseline based on international monetary trends.
Expectedly, Michael Saylor’s is even more bullish, set around $13 million per BTC within the next 21 years. In March, Standard Chartered Bank raised the BTC price forecast from $100,000 to $150,000 by the end of 2024.
November’s presidential elections will likely have cleared much of this uncertainty. If former President Donald Trump gains his second term, Bitcoin should see a price breakout. While Trump has grown to see Bitcoin as a strategic asset to hold, the other side is more focused on heavier taxation alongside even greater government spending.
In both scenarios, this would drive Bitcoin’s value through the current ceiling.
Are you self-custodying BTC or do you prefer the convenient exposure via MSTR or one of the Bitcoin ETFs? Let us know in the comments below.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
The post Bitcoin’s Uptober Potential: Another Rally in the Cards? appeared first on Tokenist.
