Despite recent volatility in the crypto market, Bitcoin is poised for a potential surge to $100,000 by the end of 2024, buoyed by several favorable factors. Matt Hougan, Chief Investment Officer at Bitwise, highlighted these catalysts in an investor note, emphasizing the potential for long-term investors amidst current market uncertainties.
Hougan pointed to significant inflows into U.S. spot Bitcoin exchange-traded funds (ETFs), supply constraints post-halving, anticipated launches of Ethereum spot ETFs, potential U.S. Federal Reserve rate cuts, and evolving political dynamics in Washington as key drivers for Bitcoin’s upward trajectory.
He pointed out that the cryptocurrency market is currently experiencing a paradoxical situation: short-term news may be negative, but long-term prospects remain strong. This presents an appealing opportunity for investors with a focus on the future.
The latest U.S. inflation report, revealing a 0.1% drop in the Consumer Price Index (CPI) for June, may strengthen the Fed’s leaning towards rate cuts. This could be advantageous for risk assets such as Bitcoin, with the CME FedWatch Tool suggesting an 84.6% likelihood of rate reductions beginning as soon as September, potentially aligning with favorable conditions for Bitcoin.
Despite concerns over Mt. Gox creditors and Germany’s Bitcoin sales affecting market sentiment, the growing demand for ETFs suggests robust future prospects. Since their launch in January, spot Bitcoin ETFs have attracted $15 billion in net new assets, with anticipation building for broader adoption by major wealth management platforms later this year.
Hougan concluded, “When large wealth management platforms integrate these ETFs, likely later this year, we anticipate substantial additional inflows into Bitcoin.”