Is Bitcoin on Track to Hit $100,000 by 2025?

Bitcoin (CRYPTO:BTC) has had an interesting year. From the start of 2024 to its all-time high on March 14, Bitcoin has jumped 73%. However, it’s been a very volatile four months since then. Bitcoin has performed well over the last few weeks, but it’s currently 12% away from that peak price (as of July 18).

Bulls are hoping a breakout could happen. Having said that, is the world’s leading cryptocurrency on track to break the psychologically important six-figure mark by hitting $100,000 sometime in 2025, setting a new record? Let’s see if that 52% gain (at today’s price) is a possibility.

Multiple catalysts

Less than two years ago, towards the end of 2022, Bitcoin’s price was below $16,000. That year was a tough one for risk assets, a category that includes cryptocurrencies and stocks, but it’s been remarkable to see Bitcoin rally since then.

The top digital asset can thank a few recent catalysts for its performance. The most notable this year was the Securities and Exchange Commission’s (SEC) approval of spot Bitcoin exchange-traded funds (ETFs). This highly anticipated event legitimized Bitcoin on both Wall Street and in Washington, and opened the doors for much more capital to flow into the asset in a way that was both appropriate and compliant.

Another catalyst was the April halving, which halved the supply of new Bitcoin entering the market. This occurs approximately every four years as it strengthens Bitcoin’s fixed issuance schedule. The digital asset has typically experienced a major bull run in the months that followed.

I believe that Bitcoin’s wider acceptance is another step in the right direction. For example, in this year’s election cycle, politicians are starting to make Bitcoin more specifically and crypto more generally a major issue.

The possibility of an interest rate cut could also boost Bitcoin’s price. This is because investors will start taking more risks in an effort to achieve higher returns. And given Bitcoin’s impressive track record, if the Federal Reserve becomes more accommodating, demand for Bitcoin could increase.

Previous cycles

As I mentioned above, after a halving event occurs, Bitcoin’s price usually skyrockets for 12 to 18 months or more. Of course, as the asset matures, it’s no surprise that this bull run hasn’t been as spectacular as previous ones.

For example, in the 17 months following the halving in July 2016, the price skyrocketed 2,890%. And in the 18 months following the halving in May 2020, Bitcoin’s price increased almost eightfold.

The story continues

Therefore, it is safe to assume that Bitcoin’s price will increase at a slower pace. However, seeing it increase by 52% by the end of next year seems like a completely realistic scenario that fits the trend of softening returns post-halving.

Keep this in mind

While I believe it’s entirely possible that Bitcoin will hit $100,000 next year, it’s important to understand that short-term projections are often inaccurate. Worse, they provide a false sense of certainty that can lead to poor investment decisions. As a result, you shouldn’t buy Bitcoin with a 12 or 24-month outlook expecting a big gain in 2025. A healthier investment horizon would be a few years down the road.

Instead, it’s always best to have a long-term mindset. This will allow you to focus on what’s important, like Bitcoin having a strict supply cap and being a decentralized digital currency that’s not controlled by a single entity. If these characteristics resonate with you, you can buy this crypto with a time horizon of at least five years.

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Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has a position in Bitcoin and recommends Bitcoin. The Motley Fool has a disclosure policy.

Is Bitcoin On Track To Reach $100,000 By 2025? was originally published by The Motley Fool