Bitwise’s Chief Investment Officer, Matt Hougan, recently shared his belief that Bitcoin could potentially reach new all-time highs of $80,000 this year, but under specific conditions. In a note to investors on Oct. 9, Hougan outlined the key factors that could impact Bitcoin’s upward trajectory, including the outcome of the US election, economic conditions, and stability within the crypto industry.
US Elections
Hougan suggested that Bitcoin’s price could surge to $80,000 if the results of the upcoming US election do not lead to a complete Democratic victory. While many view the election as a choice between pro-crypto Donald Trump and ‘lukewarm’ Kamala Harris, Hougan explained that the situation is more nuanced. He pointed out the varying opinions within the Democratic party regarding the cryptocurrency industry, ranging from anti-crypto views to strong support for the technology. Hougan argued that if the Democratic party does not secure both the White House and Congress, they are likely to take a more neutral stance towards the industry, which could benefit Bitcoin’s price.
Economic Conditions
Hougan also highlighted the importance of economic developments in shaping Bitcoin’s potential rally. He predicted two more rate cuts from the Federal Reserve by the end of the year, totaling 50 basis points, along with additional fiscal stimulus from China. Hougan emphasized the market’s anticipation for these rate cuts and fiscal measures, stating that their implementation could pave the way for a Q4 rally in Bitcoin’s price.
Stability in the Crypto Industry
Another crucial factor that could propel Bitcoin past $80,000 this year is stability within the crypto industry. Hougan stressed the significance of avoiding major disruptions such as hacks, lawsuits, or an influx of previously locked tokens entering the market. Maintaining stability in the industry could contribute to Bitcoin’s price surge.
‘Animal Spirits’
While Bitcoin’s success does not hinge on other cryptocurrencies, Hougan noted that positive sentiment in the broader crypto market could boost Bitcoin’s performance in the short term. He mentioned the potential for Bitcoin to reach $100,000 in a matter of months, particularly if “animal spirits”—pro-crypto sentiment—sweep through the market. Hougan also highlighted the growth in stablecoins and the emergence of high-throughput blockchains like Sui and innovative projects like Babylon as factors that could support Bitcoin’s upward momentum.
At the time of writing on Oct. 9, 2024, Bitcoin is ranked #1 by market cap, with a market capitalization of $1.22 trillion and a 24-hour trading volume of $25.71 billion. The total crypto market is valued at $2.15 trillion, with Bitcoin dominance at 56.71%.
In conclusion, Hougan’s insights suggest that Bitcoin’s price could potentially reach new heights this year, contingent upon specific conditions such as the outcome of the US election, economic developments, and stability within the crypto industry.