Renowned crypto asset hedge fund manager Charles Edwards has made a bold prediction about the future price of bitcoin. Edwards, founder of Capriole Investments, shared his perspectives via X (formerly Twitter), which outlines a compelling case for bitcoin's potential to reach $280,000 next year.
In his statement, Edwards referenced historical data and several key factors that could drive the price of bitcoin to new heights. He began by comparing bitcoin's performance after the 2020 halving event, stating: “If bitcoin's post-halving returns are the same as 2020, we are looking at $280,000 worth of bitcoin next year.”
bitcoin price could surpass $300,000 next year
As the Edwards chart shows, the third bull run in 2020 was quite moderate compared to the previous ones. The first bull market (halving cycle) in 2012 saw the price of bitcoin reach a high of $1,132, marking a dramatic increase of 8,996% in 11 months (335 days). The second bull run of 2016 ended in December 2017, when the price reached approximately $20,000, an increase of 2,089% in 17 months (518 days).
Edwards acknowledged that some might argue that profits decline with each cycle. However, he countered that 2020 performance was limited due to major factors. First, Edwards attributed the lackluster performance of the 2020 bull market to China's decision to ban bitcoin mining, which led to a 50% reduction in hash rate and had a smothering effect on bitcoin.
Secondly, he highlighted the aggressive tightening measures taken by the Federal Reserve, which negatively impacted bitcoin's performance during that period, stating: “2020 was the worst bitcoin bull market in history. I think the overall performance was limited due to the -50% destruction of the mining network by China and the most aggressive Fed tightening cycle in history.”
However, Edwards expressed optimism about the future, pointing to a contrasting economic outlook in 2024. He stated: “In fact, 2024 marks the polar opposite of 2021. QE resumed and the Federal Reserve began to ease, and the Fed chair Powell expects three cuts. this year. A weaker dollar = a stronger bitcoin.”
He also compared the upcoming January bitcoin ETF launch to a “second halving,” highlighting the potential impact on the market, saying: “Furthermore, I consider the January bitcoin ETF launches to be as powerful as a ‘second halving’. halving'”.
Drawing parallels with the gold market, Edwards emphasized that bitcoin's current market capitalization of around $800 billion is significantly lower than the market capitalization of gold when the GLD ETF was launched in 2004.
He noted that gold experienced a parabolic rise of more than 300% in just seven years after the ETF's launch, stating: “With a market capitalization of around $3.3 trillion, gold began a parabolic rise of more than 300% to 13 billion dollars in less than 7 years. years. bitcoin's market cap today is just over $800 billion. “Smaller assets are generally able to experience greater upside returns.”
Furthermore, Edwards underlined the rapid growth of bitcoin, stating that it is currently outpacing the adoption rate of the Internet and said: “bitcoin is currently growing faster than the Internet.”
The hedge fund manager concluded by summarizing his prediction, stating:
Historically, a 500% return over the 18 months following the halving would not be unusual for bitcoin. An additional 300% return over the next 2-5 years from ETFs alone would be a conservative assumption. When you look at the two most important factors for bitcoin in this cycle and add them up, it is easy to arrive at a conservative bitcoin price of $300,000 in the coming years.
At the time of publication, btc was trading at $43,134.
Featured image from YouTube/Blockworks, chart from TradingView.com
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