Bitcoin on the Way to $1M? — Evening Brief – 12.05.24
Bitcoin eclipsed the psychological level of $100,000 for the first time ever late Wednesday with no signs of losing momentum at this point, with some analysts predicting much higher prices.
The latest rally occurred following President-elect Donald Trump’s nomination of pro-crypto Paul Atkins to head the Securities and Exchange Commission. The crypto market has surged by approximately $1.4 trillion since Trump’s victory, on a platform that categorically supports the market.
Recent developments have lifted the projected overall market cap to over $3.7 trillion, as reported by CoinMarketCap, positioning Bitcoin above Saudi Aramco as the seventh largest ‘asset’ globally.
“We remain convinced $100,000 is not the final milestone. We expect Bitcoin to hit a cycle-high of $200,000 in late 2025,” Bernstein analysts wrote on Thursday. They also anticipate the price to rise to $500,000 by 2029 and $1 million by 2033.
Crypto enthusiasts see the rally as confirmation of evidence that Bitcoin is a modern-day store of value and inflation hedge. “This milestone reflects growing confidence in Bitcoin as a store of value and a hedge against macroeconomic uncertainty,” Brett Reeves, head of Go Network at institutional digital asset infrastructure provider BitGo, wrote in a note shared with Connect Money. “This borderless asset continues to be adopted by individuals, institutions and governments alike, something that is envisaged to continue in the years to come.”
The year had already been eventful for bitcoin, as it had seen the approval of spot bitcoin ETFs and a “halving” that slowed the rate at which new bitcoin was introduced into the market. The increase in bitcoin prices has been facilitated by a supply-demand imbalance.
Bitcoin ETFs have garnered inflows of over $32 billion this year, with over $8 billion received since Trump’s election. According to CCData, the aggregate trading volume for digital assets and associated derivatives on centralized exchanges reached an unprecedented $10 trillion last month.
One ETF has experienced substantial growth. In just 228 days, BlackRock’s iShares Bitcoin Trust (IBIT) has surpassed $50 billion in assets under management, a feat that is more than five times quicker than any other ETF in history. The SPDR Gold Trust ETF (GLD) needed five and a half years to get to that level.
“Most investors are underestimating the price potential from continued global flows into bitcoin, whether from companies adding to their balance sheet or inflows into ETFs,” Chris Rhine, portfolio manager of the SPDR Galaxy Hedged Digital Asset Ecosystem ETF, wrote in a note shared with Connect Money. “The outlook for crypto is incredibly strong and returns are likely to outperform other risk assets.”