There is no doubt that the cryptocurrency asset class has been one of the best performing categories in recent times. Just look at Bitcoin (BTC -2.26%)whose price has risen significantly over the past decade.
Even in 2023, The world’s most valuable digital assets It rose 154%, a gain that crushes the overall stock market. However, Bitcoin is still 38% below its all-time high.
Bulls are not deterred. They are encouraged by momentum. They have their sights set on $100,000 per coin. Can Bitcoin rise 130% from today’s levels to reach this major milestone?
Suitable preparation
Bitcoin has been in the news a lot lately. This is because digital assets have achieved something that has been long overdue. This is spot approval Bitcoin exchange-traded funds (Traded Funds).
Earlier this month, Securities and Exchange Commission Finally, these financial products were allowed to be put on the market. Bitcoin’s gains in 2023 may have been due to the investment community’s anticipation regarding the approval of ETFs. Many consider this to be a monumental event in the history of Bitcoin, finally making this a legitimate financial asset in the eyes of the government and Wall Street.
Spot Bitcoin ETFs are now very cheap and easy to gain exposure to Bitcoin price movements. Investors do not have to open a separate brokerage account with a cryptocurrency exchange or worry about self-custody issues anymore. Bitcoin bulls hope that ETFs will introduce a new wave of capital into the asset, which could cause the price to rise over time.
Besides the regulatory stamp of approval, there is another event that will push Bitcoin to a higher price. It is scheduled to happen in April this year blockchain The network will be subject to what is known as halving. This is when Bitcoin rewards that Miners Obtaining approval for transactions and securing the blockchain is halved. This happens approximately every four years, and has historically created a bullish environment for Bitcoin.
Just look at the last time this happened. In May 2020, Bitcoin experienced its final halving event. The cryptocurrency has surged in the past two months. And in the 18 months following the half. Bitcoin rose 661% to eventually reach an all-time high of nearly 69,000 in November 2021.
If something similar happens this time, the digital asset could reach a new price peak 12 to 18 months after the next halving. Maybe the $100,000 mark is the new milestone to achieve.
Solve the problem
It’s easy to get caught up in Bitcoin’s short-term price action, but investors should take the time to understand what truly makes this cryptocurrency special.
Bitcoin proponents have incredibly strong views on this digital asset because of the problem it solves. By being a decentralized, global payments network not controlled by any central authority, Bitcoin is essentially trying to disrupt the system. Federal Reserve And the current monetary system. Some people claim that central bankers have done more harm than good by constantly manipulating interest rates to solve inflationary and economic issues that they seem to have no understanding of.
Additionally, keep in mind that US government debt currently stands at $34 trillion, a number that has been rising over the past four decades. This doesn’t even include underfunded liabilities like Social Security and Medicare. The idea here is that the government will have no choice but to continue printing money in the future, making the debt burden more difficult to overcome.
This turbulent monetary situation appears to be unsustainable. The characteristics of Bitcoin, especially the fact that it has a fixed maximum supply of 21 million coins, coupled with the fact that it is not controlled by anyone, makes it an attractive asset to have in your wallet.
While it is difficult to predict near-term price movements, there is a possibility that Bitcoin could reach $100,000 in a short period of time. However, investors should only buy this asset if they believe in its long-term potential, with the intention of holding it for the next decade. Taking this time horizon into account, the price could end up being well above $100,000.
Neil Patel and his clients have positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.