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Can BTC reach $100,000? – Forbes Advisor
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Since its launch in 2009, bitcoin (BTC) has made headlines and attracted the interest of tech enthusiasts and investors. The cryptocurrency has seen multiple meteoric rises, rising from less than $500 in 2013 to more than $64,000 by 2021.
After a sharp decline from those heights, bitcoin fell below $17,000 in 2022. However, the cryptocurrency has since recovered, even setting a new all-time intraday trading high above $69,000 on March 6, leading many investors to wonder whether bitcoin will continue its meteoric rise and reach six figures.
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When Will Bitcoin Reach $100,000?
No one knows for sure whether bitcoin will rise or fall in value in the coming days, weeks, months, or years. However, one way to predict future price changes is to consider BTC previous price movements.
In January 2014, bitcoin was worth around $800. In January 2024 it was worth more than $42,000. This represents a price increase of more than 5,150% and an annualized return of more than 135% per year over the past ten years.
If bitcoin were to experience the same rate of appreciation in its average annual returns, it would reach $98,700 in January 2025 and hit $100,000 in February of the same year.
Some experts believe that bitcoin’s value could rise even faster. Frank Holmes, executive chairman of data center builder and operator HIVE Digital Technologies, says: “We could potentially see its price double in the next 12 months, up to 4 times.”
Matt Hougan, Bitwise’s chief investment officer, also believes bitcoin could see major price gains this year. He says, “We think bitcoin is in a multi-year bull market and is likely to set new all-time highs this year.”
Of course, this is a simplification of the potential price movements of bitcoin. The cryptocurrency is incredibly volatile, and that decade of 135% annualized returns saw multiple instances where bitcoin lost half its value or more in a short time and didn’t return to previous highs for months or years.
Why might the price of Bitcoin rise?
There are a handful of developments that could cause the price of bitcoin to rise.
Bitcoin Spot ETFs
On January 10, the U.S. Securities and Exchange Commission approved the first commercial Bitcoin ETFs.
The approval of these new ETFs allows providers to create ETFs that directly purchase and hold bitcoin on behalf of investors. This allows investors to trade BTC at the current or spot price. Previously, ETFs could only trade bitcoin futures contracts.
Futures are complex derivative instruments, suitable for trading only by experienced investors.
Many investors believe that spot ETF approval could increase the accessibility of bitcoin as an investment and attract investors who did not own bitcoin simply due to the complexity of purchasing cryptocurrencies.
“The price of Bitcoin is determined by supply and demand. Currently, we have a huge new source [of] demand resulting from the launch of bitcoin ETFs,” Hougan says.
Bitcoin Halving
When it comes to BTC supply, there is another factor at play. Bitcoin is about to undergo another halving.
Bitcoin works through a decentralized network of computers that work to validate transactions. Those computers are said to be “bitcoin mining. When a block of transactions is validated by generating the correct cryptographic solution, the miner who solved it is rewarded with new bitcoins.
There is a limit of 21 million bitcoins that will ever be produced, and every so often the amount of bitcoins allotted for validating a block is halved. There is no set date for the next halving, it depends on how many blocks are validated. But estimates place the next halving at some point May 2024.
The halving will reduce the supply of new bitcoins entering the market, and historically, halving events have increased trading volume and demand for bitcoins.
“In April, we’re going to see the flow of new supply coming into the market shrink by about $7 billion per year. New sources of demand and a cut in new supply is a great scenario,” Hougan says.
Level 2 solutions
The final price catalyst behind bitcoin right now is Layer-2 solutions, which have given the bitcoin network greater scalability and usability.
Previously, the bitcoin network could only be used to mine and move bitcoin between wallets. It was a digital ledger for a single cryptocurrency. However, it can now be used in other ways, such as for smart contracts or decentralized applications.
These additional applications bring greater functionality to the Bitcoin network, potentially increasing its overall value.
Could Bitcoin Crash Again?
Bitcoin has a history of extreme volatility. When it was launched, bitcoin was worth a few cents, and for many years afterward it was worth only a handful of dollars.
Since then, however, the currency has undergone significant price fluctuations.
It fell from a high of $60,000 in April 2021 to below $30,000 in July of the same year. Bitcoin then rebounded to an all-time high of $65,000 in November before bottoming out around $16,000 in late 2022.
Howard Hook, CFP and CPA at EKS Associates based in Princeton, New Jersey, says a bitcoin crash could happen for a few reasons. “One of the biggest risks that could cause Bitcoin to lose value or collapse again is regulatory issues… Other issues could simply be the arrival of another coin to replace Bitcoin as the most well-known,” Hook says.
“The finicky nature of any asset whose value is not based on something tangible can lose value just because a lot of people decide that today is the right day to sell.”
Holmes says: “I always remind investors that government policies are a harbinger of change. That said, a big risk to the price of bitcoin is anti-cryptocurrency legislation.”
The Environmental Impact of Bitcoin
Concerns about bitcoin’s environmental impact could also lead many investors to greater regulation or a shift toward other cryptocurrencies.
As of 2022, Bitcoin used 150 terawatt-hours of electricity each year, equivalent to the entire population of Argentina, and emitted 65 megatons of carbon dioxide each year.
Does Bitcoin Still Have Any Upside Potential?
Interest from government regulators and major financial industry players lends credence to the idea that cryptocurrencies may be here to stay. On March 6, the price of one BTC surpassed the intraday trading level of $69,000 for the first time ever.
The cryptocurrency market is maturing. When Bitcoin launched in 2009, it was the first of a brand new asset class, known only to a few and accessible only to the relatively tech-savvy.
Fast forward to today, and there are thousands of cryptocurrencies on the market with market caps in the tens or hundreds of billions. While other recently launched digital assets, such as NFTs, have come and gone, cryptocurrency has lasted more than 15 years and, despite significant volatility, has grown tremendously in value.
Should You Invest in Bitcoin?
Given its historical returns, bitcoin could be an attractive investment. Recent developments, such as the creation and sale of spot bitcoin ETFs, make it easier than ever for investors to add the cryptocurrency to their portfolios.
For some, the diversification and potential returns are worth the risk.
“Bitcoin, like gold, can be interesting for investors to consider [a strategy for] diversifying portfolio assets,” says Holmes.
“Last summer, Bloomberg conducted a study asking more than 600 investors what assets they would prefer to own if the United States hit the debt ceiling and defaulted on its obligations. Bitcoin was the number three asset on the list, after gold and Treasuries.”
It is important to keep in mind, however, that the risks to cryptocurrencies are significant. Although bitcoin has been around for more than 15 years, it is still a young asset class. Because of this, it can be difficult to know whether bitcoin will still be around and popular a decade from now, and if so, how much it will be worth.
Hook says everyday investors should stay away. “The asset itself is speculative in nature. While it is used as a digital currency, much, if not all, of the price of the coin is the speculative nature of what it could be,” Hook says.
Hougan, however, says cryptocurrencies represent a good opportunity. “There is no reward without risk,” Hougan says. “In bitcoin, there is usually an abundance of both.”
Frequently Asked Questions (FAQ)
What other cryptocurrencies could gain value in 2024?
The cryptocurrency market is incredibly diverse and today there are thousands of different cryptocurrencies to choose from. Bitcoin is by far the largest. But other major players like ethereum (ETH), solana (SOL) AND XRP (XRP) have seen significant price increases in recent years and could see even greater gains in the future.
How does trading bitcoin differ from trading other stocks?
Cryptocurrencies are very different from traditional securities like stocks or ETFs. Stocks, for example, represent a share of ownership in a company and its physical assets. Cryptocurrency, on the other hand, is not physical. It only exists on the blockchain.
Another big difference between cryptocurrencies and many other investment classes is that you can only trade most securities when the market is open, usually between 9:30 a.m. and 4 p.m. Eastern time on business days. Cryptocurrency markets are open 24/7.