The long-anticipated Bitcoin bull run has run out of steam. However, several factors are likely to turn it around.
Bitcoin is in a bit of a funk.
Although the price of Bitcoin has increased by almost 40% since the beginning of 2024, this is not the bull run predicted a few months ago.
With Bitcoin close to $60,000, some market watchers still expect the cryptocurrency to soar to $200,000 in the next year or so.
Here are three reasons why some say the Bitcoin bull run is just getting started.
Federal Reserve
This week, all eyes are on Jackson Hole, Wyoming.
Federal Reserve Chair Jerome Powell is expected to release clues on upcoming interest rate cuts.
The market looks confident. According to CME FedWatch According to the data, there is a 100% chance that Powell will cut interest rates at their September meeting.
According to David Brickell, head of international distribution at FRNT Financial, and Chris Mill, a former forex trader, the latest data shows that inflation is cooling, paving the way for a rate cut.
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Their latest “Connecting the dots“Newsletter, analysts said expected interest rate cuts combined with a weaker dollar, more global liquidity and a bigger appetite for risk could fuel the next rally.
“The bullish evolution of the macro has prepared the ground for Bitcoins next leg to a new record high,” they said.
Low interest rates are good for assets like cryptocurrencies, as investors are encouraged to sell low-risk Treasury bonds and instead pursue investments in higher-yielding assets.
election
For crypto watchers, the upcoming November election in the US has become a choice between Trump, who has repeatedly made pro-industry statements, and Harris, whose crypto views are more ambiguous.
Noel Acheson says some blamed the market crash in August on Harris beating Trump in the polls.
A partner at Triple Crown Digital said, “What we're seeing is an uncomfortable return of uncertainty.”
her argument? A Trump victory that seemed like a foregone conclusion a few weeks ago is now uncertain — a development that makes those in the industry uneasy about backing the Republican candidate.
Arthur Hayes, co-founder of BitMEX and one of crypto's top macroeconomic analysts, said he hopes Treasury Secretary Janet Yellen will stock the cards by pouring $1 trillion into the markets — boosting liquidity for traders — in favor of Treasury Secretary Janet Yellen Harris.
“The next stop for Bitcoin is $100,000,” Hayes wrote in a blog post last week.
“The combination of a dollar liquidity-fueled bitcoin and ether rally creates a strong foundation for the return of the sexy shitcoin soiree later in the year,” he added, referring to cryptocurrencies that aren't bitcoin or ether.
The AI boom
The artificial intelligence frenzy has driven tech stocks to record highs this year.
It also proved to be a boon for crypto. Investors pour hundreds of millions of dollars into the intersection between crypto and AI. Elsewhere, cashless bitcoin miners diversify their income by providing processing power to AI developers.
Crypto research firm Bernstein predicts that AI data centers powered by Bitcoin mining infrastructure will help cushion any price blow from macro factors.
That price floor and spot helped create the environment for investor interest in bitcoin exchange-traded funds to reach record highs.
This could help bitcoin price reach $200,000 by the end of 2025, analysts said in a July note.
Bernstein predicts the price will reach $500,000 in 2029 and exceed $1 million by 2033.
Eric Johnson is the news editor for DL News. Got a tip? Email at [email protected].
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