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Author: Matt Hougan, Chief Investment Officer of Bitwise; Compiled by: 0xjs@Bitlink Vision
Bitcoin needs three factors to hit an all-time high in 2024; another factor may accelerate Bitcoin’s development.
I’m often asked to predict prices.Sometimes I even give predictions.For example, at the end of last year, we predicted that Bitcoin will double in 2024 and trade for more than $80,000.
I still think it’s true.
butPrice forecasts are conditional.They depend on what is happening in the world.With this in mind, I think to achieve my Bitcoin $80,000 price forecast, the following conditions need to be met:
The good news is that there are not many conditions.
Conditions for Bitcoin to rise to $80,000
1. Election: As long as the Democrats don’t win a big victory
The U.S. election is of great significance to cryptocurrencies.Most people think it’s a binary result: Trump = good, Harris = bad.
There is no doubt that the Republican victory bodes well for cryptocurrencies given its strong support for cryptocurrencies.I think the situation on the Democratic side is more subtle.
Democrats have a very different view of cryptocurrency, from Sen. Elizabeth Warren (D-Massachusetts)’s “anti-cryptocurrency army” to strong support from Rep. Ritchie Torres (D-Y..The problem over the past four years is that Warren’s faction has controlled policy and agency appointments, creating a hostile environment for the industry.
The Bitcoin boom does not require politicians.It just requires politicians to walk away.Unless the Democrats sweep the two houses of Congress and the White House, I doubt they will do so,By then the Democrats will take a more neutral attitude towards the industry.
You can already comment from Maxine Waters, a senior Democrat at the House Financial Services Committee, a Democrat.Seeing Democrats succumb to this reality, she recently said, “cryptocurrencies are inevitable.”
I think this attitude is enough to get us $80,000 in Bitcoin.(It is worth mentioning that Polymarket currently believes that the Democratic Party’s chances of winning a big victory are 20%.)
Polymarket forecast: Balance of power after 2024 election
Source: Bitwise Asset Management, data from Polymarket.Data as of October 8, 2024.
2. Economy: Two rate cuts + continuous global stimulus measures
The first reason people are attracted to Bitcoin is simple: you don’t trust the government and its currency.This idea spawned Bitcoin in 2008 and remains a powerful driver of cryptocurrencies today.It is widely accepted, and even BlackRock uses it in Bitcoin marketing.
This is why the Fed lowered interest rates by 50 basis points despite the growth of the U.S. economy, while cryptocurrencies rose sharply after China launched a 2 trillion yuan economic stimulus plan at the end of September.
The market is eager for more stimulus measures.Currently, the market expects the Federal Reserve to further relax its 50 basis point policy by the end of the year, and China will also introduce more fiscal stimulus measures.
If both are achieved at the same time, I estimate that we will usher in a rebound in the fourth quarter.If not, I think disappointment may put pressure on the market.
3. Cryptocurrency: No major negative accidents
To achieve a new high of $80,000, the last thing we need to do is make sure there are no major surprises.There are no major hacking attacks.There are no large-scale new lawsuits.No previously locked tokens suddenly entered the market.
Unfortunately, the history of cryptocurrencies is full of countless such surprises.In the past few quarters, previously locked Bitcoin has been released from bankruptcy exchange Mt. Gox and government vaults, causing us to remain in range volatility.
If we can pass the end of the year safely without the impact of similar shocks, I expect to hit record highs or even surpass them.
What else can help?Altcoins
Some bitcoin users may hate me for saying that, but I think a broader rebound in cryptocurrencies will help achieve this prediction.
It should be clear that Bitcoin’s long-term success does not require Ethereum, Solana or new altcoins.In fact, it is often hurt by altcoin territories.But if we are going to achieve a full rise in the short term—like to $100,000 in just a few months—it will help to let some crypto-enabled sentiment sweep the market.
I remember the last long period of Bitcoin’s volatility was from June 2019 to June 2020, when Bitcoin was trading in a narrow range of $8,000 to $10,000 (except for a brief decline during the COVID-19 pandemic).At the end of summer 2020, Bitcoin started to rise and headed straight for $60,000.Much of this is driven by stimulus measures during the COVID-19 pandemic, but part of it is (no better words to describe) emotions.Specifically, the 2020 “Summer of DeFi” gives investors a reason to be excited about cryptocurrencies again, and some of the animal spirits spread to Bitcoin.
This year, these animal spirits have been scarce except for Bitcoin.But I can almost see them rising in areas like stablecoins, with AUMs hitting record highs; new high-throughput blockchains, where the community is uniting around projects like Sui, Aptos and Monad; and innovative projects like Babylon, it is looking at how to get Bitcoin investors to earn from staking.The strong and sustained momentum in these areas will strengthen melt-up situations.
Conclusion
It is worth remembering that Bitcoin has performed quite well this year.It is one of the best performing assets in the world, up 49%, andIts news flow is very strong.We have seen the launch of Bitcoin ETFs and become the best performing ETF ever.We have seen widespread adoption by institutions, and 60% of the large hedge funds currently hold Bitcoin.We also see Bitcoin entering mainstream political dialogue in a way that was unimaginable a few years ago.Two years ago FTX was crashing, Sam Bankman-Fried made headlines; today, Larry Fink talks on TV about Bitcoin taking over the world.
All of this shows that Bitcoin will rise to $80,000 next year regardless of the news development.But if we want to achieve this by the end of the year, the above script may help.
