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In a recent bitcoin-and-beyond” target=”_blank” rel=”nofollow”>memorandum Shared with clients, Bitwise CIO Matt Hougan emphasized several factors that could cause bitcoin (btc) to “melt” to $80,000 in the final quarter of 2024.
Factors to drive bitcoin to $80,000
Hougan highlighted three essential conditions that could lead btc to new all-time highs (ATH) in 2024. Firstly, he pointed to the upcoming US presidential election in November, which could influence the future trajectory of the btc price.
According to Hougan, anything short of a Democratic sweep would benefit the top cryptocurrency by market cap.
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In the memo, Hougan explained that while many view the election as a binary election (with Republican candidate Donald Trump favorable to the cryptocurrency industry and Democratic candidate Kamala Harris seen as damaging), the reality on the Democratic side has more nuances. He said:
The Democratic Party has disparate views on cryptocurrencies, from Sen. Elizabeth Warren's (D-Mass.) “Anti-crypto Army” to Rep. Ritchie Torres' (D-Mass.) deep support. The problem over the past four years is that the Warren wing has controlled agency policies and appointments, and that has created a hostile environment for the sector.
Hougan expressed his confidence in the Republicans and stated that a victory for them would “without a doubt” be positive for cryptocurrencies. However, he also referenced a recent comment by Democrat Maxine Waters, who said that “cryptocurrencies are inevitable,” suggesting that Democrats may become more open to digital assets.
Second, Hougan drew attention to the US Federal Reserve's (Fed) interest rate cuts. On September 18, the Federal Reserve cut key interest rates by 50 basis points (bps), sparking a rally in cryptocurrencies. Furthermore, the decision by the People's Bank of China (PBoC) to inject economic stimulus into the Chinese economy gave more fuel to boost digital assets.
Hougan noted that the market expects another 50 basis point rate cut from the Federal Reserve before the end of the year, along with additional Chinese fiscal stimulus. The cryptocurrency market could see a strong rally in the fourth quarter of 2024 if both things happen.
Finally, Hougan mentioned that a period without any major surprises would support btc's potential rally to $80,000. He concluded that negative surprises such as a major cryptocurrency exchange hack, new lawsuits, or the release of previously locked coins could derail this momentum.
Key ingredient for the Rip to $100,000 btc
Hougan also stated that growing pro-cryptocurrency sentiment would be necessary for btc to reach the ambitious goal of $100,000 in the coming months.
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He recalled the famous “DeFi summer” of 2020 as an example and foresees a similar market-wide shift towards cryptocurrencies, driven by the growing use of stablecoins, high-performance blockchains, and innovation in passive performance solutions.
In related news, crypto mining company CleanSpark CEO Zach Bradford recently opined that bitcoin could reach up to $200,000 in the next 18 months if the right conditions are met.
That said, recent geopolitical changes climbs in the Middle East may negatively affect risk assets such as stocks and cryptocurrencies in the short term. btc is trading at $61,999 at press time, down 1.4% in the last 24 hours.
Featured image from Unsplash, chart from Tradingview.com
