- The long-predicted Bitcoin bull run has run out of steam.
- However, several factors may be about to turn that around.
Bitcoin is in a bit of a funk.
While Bitcoin’s price is up almost 40% since the start of 2024, it’s hardly the bull run predicted a few months ago.
As Bitcoin hovers close to $60,000, some market watchers still hope that the cryptocurrency could soar as high as $200,000 over the next year or so.
Here are three reasons why some say the Bitcoin bull run is just getting started.
The Federal Reserve
This week, all eyes are on Jackson Hole, Wyoming.
Federal Reserve Chair Jerome Powell is expected to drop clues on potential forthcoming interest rate cuts.
The market seems confident. According to CME FedWatch data, there is a 100% chance Powell will cut interest rates at their September meeting.
The latest data shows inflation is cooling, which will pave the way for a rate cut, according to David Brickell, head of international distribution at FRNT Financial, and former forex trader Chris Mill.
In their latest “Connecting the Dots” newsletter, the analysts said the expected interest rate cuts combined with a weaker dollar, more global liquidity, and a bigger appetite for risk could fuel the next rally.
“Bullish evolution of the macro has prepared the ground for Bitcoins next leg to new record highs,” they said.
Low interest rates are good for assets like cryptocurrencies since investors are incentivised to sell low-risk Treasury bonds and pursue investments in higher-return assets instead.
The election
For crypto watchers, the upcoming November elections in the US boil down to a choice between Trump, who has repeatedly made pro-industry statements, and Harris, whose crypto views are more unclear.
Some even attributed the market dip earlier in August to Harris overtaking Trump in the polls, Noelle Acheson, said.
The partner at Triple Crown Digital said, “what we’re seeing is the uncomfortable return of uncertainty.”
Her argument? The Trump victory that seemed like a foregone conclusion just weeks ago is now an uncertainty — a troubling development for those in the industry who have gone all in to back the Republican candidate.
Arthur Hayes, co-founder of BitMEX and one of crypto’s foremost macroeconomics analysts, said he expects Treasury Secretary Janet Yellen will stack the cards in Harris’ favour by pouring as much as $1 trillion into markets — boosting liquidity for traders.
“The next stop for Bitcoin is $100,000,” Hayes wrote in a blog post last week.
“The combination of a dollar liquidity-inspired Bitcoin and Ether rally into year-end will create a strong foundation for the return of a sexy shitcoin soirée,” he added, referring to cryptocurrencies that are neither Bitcoin nor Ether.
The AI boom
The artificial intelligence frenzy has driven tech stocks to record heights this year.
It’s also proven a boon for crypto. Investors say they’ll pour hundreds of millions of dollars into the intersection between crypto and AI. Elsewhere, cash-strapped Bitcoin miners diversify their income by providing processing power for AI developers.
Crypto research firm Bernstein estimates that the AI data centres powered by Bitcoin mining infrastructure will help cushion any pricing blows from macro factors.
That price floor and investor interest in spot Bitcoin exchange-traded funds will help create the environment for record highs.
Analysts said in a July note that it will help push Bitcoin’s price to reach $200,000 by the end of 2025.
Bernstein expects the price to reach $500,000 in 2029 and hit above $1 million by 2033.
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
