Cryptocurrencies have gained about 35% since 2024, reaching a $2.25 trillion valuation. These levels haven't been reached since November 2021, confirming crypto's return.
Bitcoin leads crypto's revival. It's added $400 billion to its market in 2024 and is 10% below its all-time high of $68,000. Investors have wanted Bitcoin to reach $100,000 for years, and it appears to be possible. Due to supply and demand, a six-figure Bitcoin isn't "if" but "when."
Bitcoin's current rise is due to demand outpacing supply. Bitcoin has always had opposition, but the volume and magnitude may be unprecedented. To accommodate investor demand, Wall Street giants BlackRock and Fidelity have launched 11 new Bitcoin ETFs. These corporations own about 775,000 coins—4% of Bitcoin's supply—to back their ETFs.
This enormous shopping binge is causing a supply shortage. About 900 Bitcoins are made daily. Demand exceeds supply by 10 times as these ETFs accumulate 10,000 each day. ETF sponsors bought 11,211 bitcoins on Feb. 28.
Whether these institutions continue to accumulate is unknown, but Bitcoin's supply will be under considerably more pressure in a few months. Bitcoin's inflation rate halves every four years. Bitcoin's stable monetary policy relies on the halving, which is encoded into its code to limit bitcoins to 21 million.
Half-yearly price increases average 125% for Bitcoin. This is presumably because buyers must compete for its low supply. Prices climb after halvings, even if demand remains constant.
If this halving goes as expected, Bitcoin might hit $99,000 by year-end, close to the six-figure mark. However, diving deeper into Bitcoin's supply dynamics shows that this halving is unlike any other in its 15-year existence and might accelerate its rise beyond $100,000.
Around 19.6 million bitcoins are in circulation, but only 2.2 million are available on exchanges. This is the lowest level since early 2018. More crucially, such low levels suggest that the impending halving will be the first time in Bitcoin's history that fewer coins are on the market than before.
The ideal $100,000 recipe Add it all up. Institutions are buying at record levels, a halving in two months would lower Bitcoin's inflation rate to under 1%, and the supply is already under pressure.
Nothing is definite in crypto, but these trends could push Bitcoin to new all-time highs and above $100,000. Although it would have been fantastic to buy when Bitcoin was trading around $45,000 at the start of the year, there's plenty of evidence that Bitcoin will be a good investment even at today's prices.
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