All signs point to Bitcoin becoming more valuable than ever. Jakub Porzycki/NurPhoto—Getty Images
Many people really hate cryptocurrencies. Entire communities spend their days denouncing cryptocurrencies as tasteless, energy-consuming scams. Their opinions may or may not have a point. But sooner or later, even the haters will have to accept the fact that cryptocurrencies are here to stay and that Bitcoin, the industry's flagship asset, will likely top $100,000 by the end of the year. Dew.
As far-fetched as that may sound, consider that Bitcoin just crossed the $50,000 mark, not too far from its all-time high of around $69,000, which it hit in late 2021. The recent rally was further fueled by increased trading around China. It's a new year, and this was driven primarily by a surge in new liquidity from Bitcoin ETFs and the potential for Fed interest rate cuts in the coming months. And with the impending halving, the supply of new Bitcoins mined daily will drop from 900 to 450. It's supply and demand and everything else.
It also has a history. I've always been skeptical of people who claim that the crypto market moves on a four-year cycle, but watching a familiar series of events unfold for the fourth time, it makes sense. I think there is. In that cycle, nothing much happens for about two years, then the economy gradually recovers, then speculative free-for-alls occur, and finally, something tragic happens when the bubble bursts and everyone comes to their senses. Masu.
The first cycle peaked in 2013, when Bitcoin reached a then-unthinkable $1,200 before falling to $100 following a devastating hack. The second time was in 2017, when Bitcoin reached nearly $20,000, before a regulatory crackdown on ICOs caused the price to drop to $3,000. Then came the frenzy of 2021, when Bitcoin hit a recent all-time high before falling to $16,000 with the collapse of Sam Bankman Freed's fraud empire. I understand. But also note the important features of these cycles. Bitcoin's price floor is never close to its previous price, and each all-time high is far above its previous price. By this logic, Bitcoin reaching $100,000 is not just a possibility, but almost a certainty.
If the concept of financial cycles doesn't ring true to you, there's also a theoretical argument that Bitcoin's fundamental value proposition is getting stronger over the years. Remember that Bitcoin was originally born as a protest against the spectacle of governments printing huge amounts of money to bail out banks and then spending it like drunken sailors. In the early days of Bitcoin, it was a type of freely convertible currency, unaffected by inflation or government control. Given the extraordinary levels of US debt that I wrote about yesterday, this case looks more attractive than ever.
Does that mean Bitcoin will definitely reach $100,000 by the end of the year? of course not. But if he had to bet $50 that Bitcoin would go above or below that number, ask yourself whether you would take the top or the opposite. The disappearance of cryptocurrencies seems more far-fetched than ever. Haters may never like it, but they'll have to get used to it.
jeff john roberts
jeff.roberts@fortune.com
@jeffjohnroberts
decentralized news
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During cross-examination by lawyers representing Bitcoin developers, a British judge said: fake satoshi Craig Wright asked him to stop making “irrelevant claims” as he suggested changing his story to explain the questionable documents. (coin desk)
Court documents state the following decision: Binance Founders CZ, scheduled for February 25th, will now be held on April 30th for unstated reasons. (CNBC)
Peter Thiel's founders fund It reportedly invested $200 million in Bitcoin and Ethereum in mid-2023, a sign that VCs may be returning to cryptocurrencies. (Reuters)
digital currency group's latest shareholder letter reports strong fourth quality with increased profits and a boost to the company's valuation and investment portfolio. (luck)
meme-o-the-moment
