If you have been following my posts Bitcoin (CRYPTO: BTC) articles over the past year, you probably know that I’ve predicted a few times that Bitcoin would hit the six-figure mark sometime in 2024. With Bitcoin currently trading at around $60,000 and the year almost over, that sounds almost impossible.
Still, while some may believe that the recent correction Bitcoin has undergone has thwarted any chance of reaching a $100,000 price tag, the reality is that Bitcoin still has what it takes to reach a six-figure price tag, and it’s a prediction I stand by. Here’s why a $100,000 Bitcoin hit by the end of the year is more likely than you think.
Bitcoin’s Historical Trends Remain True
Bitcoin’s price movements are often described as cyclical, characterized by explosive bull markets that give way to brutal crypto winters, followed by accumulation phases that lay the groundwork for the next peak. This cyclical nature is not only visible over multi-year periods. It is also visible within shorter time frames, where familiar patterns seem to re-emerge. At the moment, Bitcoin appears to be following this well-established rhythm again.
Historically, the summer months have been mediocre, with an average return of 6% in June, 7% in July, and -0.07% in August, similar to what we’ve seen this year. September typically sees a mild correction averaging -4%, but things start to heat up after that as temperatures cool. The real action begins in October, with Bitcoin generating an average return of 26%, followed by an average increase of 36% in November, and then another 11% in December to close out the year.
While this may paint an optimistic picture, it’s important to remember that historical averages shouldn’t be used to predict what will happen in the future. Looking at them is less about predicting precise numbers and more about showing what’s possible under similar market conditions. From this standpoint, the similarities between Bitcoin’s performance this year and previous trends are striking. While only time will tell, history says that Bitcoin has what it takes to reach over $100,000 by the end of the year, especially given its track record of growth in the last quarter.
An extra bonus comes into the game
There are clear similarities between this crypto bull run and previous bull runs, but there’s one additional factor to consider that could potentially give Bitcoin the extra push it needs to reach $100,000: interest rate cuts.
After about two and a half years of steady rate hikes, experts believe the Federal Reserve will pivot at its upcoming September meeting and implement at least a 0.25 percentage point cut. Bitcoin could benefit from this potential decision.
Bitcoin is often viewed as a “risk-on” asset, meaning that it tends to perform well when investors are willing to take on more risk in search of higher returns. In a lower interest rate environment, traditional assets like bonds and dividend-paying stocks, which tend to perform well when rates are high, may lose their appeal. This shift encourages investors to seek out higher-risk assets like Bitcoin, which have greater growth potential.
Additionally, interest rate cuts can weaken the US dollar, which is beneficial for Bitcoin. As a decentralized, non-sovereign currency, Bitcoin is often viewed as a hedge against traditional financial systems and fiat currencies. When the dollar loses value, Bitcoin’s appeal as a store of value increases, driving more capital into the cryptocurrency.
And excitingly, the timing of this potential rate cut aligns perfectly with Bitcoin’s historical pattern of strong performance in the final months of the year.
The way forward
While there are notable similarities between this bull market and previous ones, it goes without saying that nothing is certain. Do I believe Bitcoin has what it takes to reach $100,000 in the next four months? Yes. But if it doesn’t, there’s no reason to worry or panic. Whether it’s this year or next, Bitcoin’s fundamentals and economic landscape will ensure that it continues to increase in value over the years to come.
There will undoubtedly be volatility and corrections, but just as we consider the days of Bitcoin under $10,000 to be long gone, so too will the days of Bitcoin under $100,000 one day become a distant memory.
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RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
Prediction: Bitcoin Will Hit $100,000 By Year’s End was originally published by The Motley Fool
