Bitcoin Price Could Skyrocket to $180,000 Ahead of Halving

Investment research firm Fundstrat has released a note projecting a potential surge in the price of bitcoin, predicting it could skyrocket by 521% to reach $180,000 before the cryptocurrency’s scheduled halving in April 2024.

According to Fundstrat’s analysis, bitcoin’s daily demand currently amounts to approximately $25 million, which is equivalent to the daily mining rewards earned by miners. However, the situation could change significantly with the potential launch of a bitcoin exchange-traded fund (ETF). If a bitcoin ETF were to be introduced, it could introduce an additional $100 million in daily demand for the cryptocurrency.

With the scheduled halving in April 2024 set to slash the daily mining rewards to $12 million, there would be a substantial increase in demand compared to the available supply. Fundstrat explained that the equilibrium price would need to rise in order to match the daily supply and demand. The firm estimates that the clearing price required to reach equilibrium is between $140,000 to $180,000 per bitcoin, before the halving event occurs.

The halving, or halvening, is perceived as a bullish event for bitcoin, as it involves cutting the mining reward given to miners in half. Historically, halving events have led to price increases, as they serve to limit the supply of bitcoins.

In a previous note to clients, Fundstrat’s head of digital asset strategy, Sean Farrell, highlighted the multiplier effect on the bitcoin network, suggesting that a demand increase of $1 could lead to a market cap increase of $4 to $5.

Regarding the possibility of a bitcoin ETF approval, Farrell sees a 75% probability of it being approved in the near term, with several prominent firms, including BlackRock and Fidelity, awaiting the SEC’s response to their ETF application filings. Farrell believes that the introduction of a bitcoin ETF would attract new investors and drive increased demand for bitcoin.

Furthermore, Fundstrat pointed out that if approved, a bitcoin ETF from BlackRock could become one of the biggest ETF launches on record. In its first year of inflows, the ETF could potentially surpass the record held by the Invesco QQQ ETF, which attracted $36 billion in inflows in the year following its March 1999 launch.

The note also highlighted the potential for bitcoin ETFs to eventually surpass the precious metals ETF market, which currently holds nearly $230 billion in assets. Fundstrat speculates that bitcoin ETFs could eventually become a category exceeding $300 billion, further contributing to the surge in demand that could push the price of bitcoin into the triple-digit range.

As the cryptocurrency market continues to evolve and attract increased interest from institutional investors, the potential for significant price growth remains a topic of great interest and speculation among analysts and investors alike.