Bitcoin is getting closer to $70,000, and everyone’s talking about it hitting $100,000. But is it really possible? Crypto analyst Axel Bitblaze thinks so, and he’s got some interesting reasons why.
Liquidity: The Key to Bitcoin’s Rise
Bitblaze says that liquidity is the most important thing in the crypto market. He points to past bull runs, like in 2016 and 2020, which were fueled by a lot of money flowing into the market. So, the question is: will there be enough money to push Bitcoin even higher this time?
Stablecoins: The Gateway to Crypto
Bitblaze thinks that stablecoins, which are cryptocurrencies pegged to the US dollar, are crucial for the crypto market. They’re like the bridge between traditional money and crypto. The total value of stablecoins is at a record high, with Tether (USDT) being the biggest player.
Bitblaze says that historically, the price of Bitcoin has moved in line with the value of USDT. So, even though USDT is growing, Bitcoin hasn’t moved much recently. This means there’s a lot of money waiting on the sidelines, ready to jump into Bitcoin.
Accounting Rules: A Big Boost for Bitcoin
Right now, companies have a hard time holding Bitcoin because of accounting rules. If a company buys Bitcoin and the price drops, they have to report it as a loss, even if the price goes back up later. This makes companies hesitant to invest in Bitcoin.
But things are about to change. A new accounting rule is coming out in December 2024 that will let companies report Bitcoin at its current market value. This could encourage more companies to buy Bitcoin, similar to what MicroStrategy has done.
Macroeconomics: A Tailwind for Bitcoin
Bitblaze also looks at the bigger economic picture. The M2 money supply, which includes all the money circulating in the economy, is at a record high. Historically, Bitcoin has gone up when the M2 money supply increases.
With interest rates going down and more money being printed, investors might be looking for alternative investments, like Bitcoin.
Money Market Funds: Shifting to Bitcoin
Investors have been putting their money in money market funds, which are considered safe. But as interest rates keep going down, these funds will become less attractive. Bitblaze thinks this could lead to a lot of money flowing into riskier assets, like Bitcoin.
The Big Picture: Lots of Money Waiting
Bitblaze adds up all the potential sources of money that could flow into Bitcoin: the M2 money supply, money market funds, corporate cash holdings, and stablecoins. This adds up to a huge amount of money, much more than the total value of all cryptocurrencies.
He says that even a small percentage of this money flowing into Bitcoin could push the price up significantly. He points out that Bitcoin ETFs have already seen a lot of investment, even without interest rate cuts or a lot of new money being printed.
So, could Bitcoin hit $100,000? It’s possible. Bitblaze’s analysis suggests that there’s a lot of money waiting on the sidelines, and the right conditions could trigger a big move in Bitcoin’s price.
