Bitcoin’s estimated halving date is April 28, 2024.
The Bitcoin halving, which takes place every four years, is getting closer and closer, and the dawn of the bull market is about to appear. In the first halving cycle, Bitcoin rose from two US dollars to more than 1,000 US dollars, an increase of more than 500 times. In the second halving cycle, Bitcoin rose from more than 100 US dollars to 20,000 US dollars, an increase of more than 100 times. In the third halving cycle, Bitcoin rose from 3,000 US dollars to more than 60,000 US dollars, an increase of more than 20 times. Now we have come to the fourth halving week of Bitcoin, so how high can Bitcoin rise in this round?
Many bloggers and experts have made predictions about this. Some of them said it would be 100,000 US dollars, some said it would be 200,000 US dollars, and some said it would be 1 million US dollars. However, they all overlooked an important question, which is what is the probability? For example, what is the probability of rising to 100,000 yuan? 100% or 50%, what is the probability of rising to 1 million US dollars? Is it 1%. Or 10%. If I predict that Bitcoin will rise to 10 million US dollars in 2025, but its probability is only 0.1%, then this prediction is meaningless. Therefore, our prediction must be based on a high degree of certainty, otherwise it will be meaningless. Under the interference of different external conditions, the price of Bitcoin will also be different.
The price of Bitcoin is mainly affected by two factors: internal factors and external factors. Internal factors refer to factors within the blockchain industry, that is, the Bitcoin halving cycle. External factors are factors in the traditional world, such as the Federal Reserve's interest rate hike, Bitcoin ETF, and the US general election.
Let's first look at the halving cycle. The halving cycle is an unchangeable rule written into the Bitcoin code, which means that every four years or so, the Bitcoin mining reward will be halved. When Bitcoin was first launched in 2009, its mining reward was 50 BTC per block. In 2012, it was halved for the first time, becoming 25, in 2016 it was halved for the second time, becoming 12.5, and in 2020 it was halved for the third time, becoming 6.25. By 2024, Bitcoin will be halved again. As we all know, mining rewards are the main source of income for Bitcoin miners. If Bitcoin production is halved, then assuming that the cost remains unchanged, if miners want to maintain their original income, they must double the price of Bitcoin. Therefore, from the perspective of the entire market supply and demand, assuming that the demand remains unchanged, if the supply is reduced by half, the price will inevitably double. The demand for Bitcoin here is actually the consensus of Bitcoin, and this consensus has been increasing. In other words, the demand for Bitcoin has been increasing. So, in general, from the most conservative point of view, in 2025, Bitcoin will at least double, that is, reach 40,000 US dollars. This is a lower limit, and the possibility of reaching this price is almost 100%. On the other hand, within the industry, in addition to changes in supply and demand, there is also hype about the halving concept. Of course, this hype will continue to decrease as Bitcoin's market share decreases. In the first halving cycle, Bitcoin rose more than 500 times, and the second was more than 100 times, which is almost one-fifth of the first. The third increase was more than 20 times, which is one-fifth of the second. So according to the decreasing trend of the increase, the increase in this halving is one-fifth of 20 times, that is, 4 times, and the corresponding price is 80,000 US dollars. In general, the cycle and hype within the industry can allow Bitcoin to reach a price of 40,000 to 80,000 US dollars in 2025.
Next, let’s look at external factors.
First of all, the biggest external factor is the Fed’s interest rate cut. The interest rate cut will bring a large amount of funds to the market, and part of these funds will flow into the crypto market, thereby pushing up the price of Bitcoin. So, the most critical question is, when will the interest rate be cut?
According to industry insiders, the Federal Reserve will cut interest rates around mid-2024. Their analysis is based on inflation data and unemployment rates. We will not go into detail here. What I am talking about here is another external factor related to it, the US presidential election. As we all know, the US presidential election is held every four years, and the Bitcoin halving cycle is also every four years. This four-year halving is likely to be deliberately designed by Satoshi Nakamoto. Moreover, it is not only halved every four years, but the year of the halving is also the year of the US presidential election. Next year is 2024, Bitcoin will halve in April, and the presidential election will be held in November. So, what is the relationship between the presidential election and interest rate cuts? The logic is that stimulating the economy by flooding the market is an important means for politicians to win voters, but the bad consequence of flooding the market is inflation. Therefore, when inflation is high and people feel that prices are too high, politicians have to raise interest rates in order to stabilize people's hearts. Raising interest rates will control inflation, but it will also bring new problems, that is, the stock market and housing market will fall, causing people's investments to suffer losses. In the past two years, under Biden's rule, interest rates have been raised, many people's investments have been damaged, and many people have lost their jobs. These people will vent their anger on the president, so the next president's campaign slogan must be to cut interest rates and implement a new round of quantitative easing to keep the economy in a false prosperity and push the consequences of inflation to the next president. Therefore, from these two perspectives, it is highly likely that interest rates will be cut in 2024 or 2025.
In addition, there is another most important external factor that Bitcoin ETF may be approved. Bitcoin ETF refers to an exchange-traded fund that tracks the price of Bitcoin. If you buy a Bitcoin ETF, it is equivalent to indirectly buying Bitcoin. Although you buy a fund and do not hold real Bitcoin, their returns are exactly the same. Bitcoin ETF has two major advantages. The first is that for ordinary retail investors, there is no need to learn complex and difficult technical operations such as cold wallets and mnemonics. You can invest in Bitcoin in a simple way like buying stocks, which expands the audience of Bitcoin. The second is that for large traditional funds that have a lot of money, they can invest part of their money in Bitcoin in a completely compliant manner, thus increasing the funds on the market. For them, even a small part of the money will have a great impact on the Bitcoin market. At the same time, Bitcoin ETF will also have a great impact on market sentiment. People will compare Bitcoin ETF with the gold ETF of that year. After the gold ETF was approved that year, the gold market had a super bull market. Now, Bitcoin is called digital gold, and it plays the role of gold in the future virtual world of the metaverse. Therefore, it is entirely possible that it will have another round of bull market similar to gold. So, is it possible for Bitcoin ETF to pass? In 2021, the Bitcoin futures ETF has been approved, and now everyone is waiting for the approval of its spot ETF. Now, Wall Street heavyweights such as BlackRock and Fidelity have begun to apply for Bitcoin spot ETFs. Although they have been rejected by the SEC, this request has been supported by the court. At the same time, more and more large Wall Street institutions have also joined the ranks of applications. Therefore, at present, it is only a matter of time before the Bitcoin spot ETF is approved. In summary, judging from the above external factors, the possibility of a sharp rise in Bitcoin is very high, and Bitcoin already has the possibility of starting a bull market.
So, driven by both internal and external factors, how much will Bitcoin be worth in 2025? Here we refer to the prediction of Cathie Wood, the founder of ARK and known as the female version of Buffett, for estimation. Cathie Wood predicts that Bitcoin will reach 1 million US dollars in 2030. This time point is probably the next bull market. If we work backwards and convert it according to the proportion, the highest price of Bitcoin in the bull market in 2025 should be 280,000 US dollars.
From a comprehensive perspective, under the influence of internal factors, Bitcoin can conservatively reach 40,000 to 80,000 US dollars. If these and external factors are added, it may reach 280,000 US dollars. I believe that 40,000 to 280,000 is a relatively objective price range forecast. That is to say, if there is no increase (or decrease) in interest rates, and no ETF is passed, and none of these happen, then in the worst case, Bitcoin should reach 40,000 US dollars, and it cannot be lower. It is likely to return to the previous round of highs of more than 60,000 US dollars. If you are more optimistic, it will be 80,000 US dollars. If the external environment improves, it may challenge 280,000 US dollars. However, if you say it wants to reach 500,000 US dollars or 1 million US dollars, I think it is impossible. I think such a super bull market will not happen until the bull market in 2029/2030, because at that time, the depression period of the Kondratieff cycle will end, and a new round of Kondratieff cycle will start. At that time, the conditions for a real bull market will be met.
The last question is, in which month will the big bull market of 2025 occur? According to the previous situations, it usually occurs at the end of the year, but the bull market of 2021 is a double top. So it is difficult to predict the specific month, but it is likely to be in the second half of the year. In the months when the top may appear, we must pay close attention and escape the top at the appropriate time. Then, take our profits to the next round of bear market to buy the bottom, and so on, constantly increasing our wealth.
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