Until now in 2023, Bitcoin (CRYPTO: BTC) has been one of the top-performing cryptocurrencies, up more than 57%. Bitcoin trades for around $26,000 after briefly breaking the $30,000 price level earlier this year.
But Bitcoin is still nowhere near its $68,789 all-time high, which was reached in November 2021. Nevertheless, a growing number of analysts, investors, and cryptocurrency enthusiasts still think that Bitcoin will surpass the $100 000 level sometime in 2024. While that price trajectory may sound outrageous, there are three compelling reasons why it could happen.
Bitcoin as Electronic Gold
One of the main arguments around Bitcoin is that it functions as “electronic gold,” making it a good store of value, especially in volatile economic conditions. Therefore, during the banking disaster that began earlier this year, investors looking for a safe asset outside of the traditional banking and the financial system turned to Bitcoin, and indeed, the correlation between Bitcoin and gold increased in 2023.
Institutional Adoption
It is fine, but what if you got burned by Bitcoin in 2022 and are still skeptical? Gold, after all, doesn’t lose 65% of its value in a year, it is acceptable. There is another route to the magic $100,000 price level, and it involves the long-term growth story around institutional adoption.
Bitcoin, after all, is more than an easy store of value; it is also a form of payment and a potential replacement for several building blocks of the modern financial system, including the U.S. dollar.
Leading investor Kathy Wood of Ark Invest, for example, has analyzed eight different use cases for Bitcoin in the global economic system. By taking a closer look at each of these eight different use cases for Bitcoin in the global economic system. Looking more closely at each of these eight areas and then extrapolating growth rates going forward, Wood arrived at a USD 1.48 million price target for Bitcoin.
Bitcoin’s Halving
There is a technical event that could influence the price of Bitcoin, known as a halving. This event occurs only once every four years and is highly anticipated by the Bitcoin community. In a halving event, the reward paid to Bitcoin miners for mining a new block on the blockchain is halved.
The next Bitcoin halving is scheduled for April 2024, and investors are already submitting aggressive price targets above $100,000 for Bitcoin. For example, Normal Chartered Financial Institution believes Bitcoin will reach that figure by the end of 2024.
The Path to $100,000
As can be seen, there are several paths Bitcoin can take to reach $100,000. While the target price may sound absurdly high, especially given the particular macroeconomic environment, the potential certainly exists. Certainly, there are wildcard factors, such as the Securities and Exchange Commission (SEC), which could move to common Bitcoin at any time, and the Federal Reserve, which has demonstrated the ability to increase the price of Bitcoin simply by raising interest rates.
Taking into account what has been explained, there is hope in the fact Bitcoin remains bullish in both the short and long term. While it is undoubtedly a volatile electronic asset, it has a long history of outperforming the market going back nearly a decade.
By Marina Meza
