The Impact of Major Events on Bitcoin
The COVID-19 pandemic, inflation, and regional conflicts have had a direct influence on the decline in Bitcoin’s value over the past two years. However, Blockstream CEO Adam Back believes that 2024 will be a period of resurgence for the cryptocurrency.
The Effect of “Biblical” Events
Back discussed the potential price action of Bitcoin as the next halving approaches. The halving will result in a reduction of Bitcoin miners’ block reward from 6.25 BTC to 3.125 BTC. This programmed event takes place after every 210,000 blocks.
Back suggests that previous market cycles and halvings indicate that Bitcoin’s value is trailing behind projections. The price of BTC has been impacted by various events, including the COVID-19 pandemic, quantitative easing, and wars. These factors have affected power prices and led to inflation and bankruptcies.
Market Impact and Portfolio Management
According to Back, these events have significantly affected markets and portfolio management. Investment managers have had to sell more liquid assets to manage risk and losses in recent years. Bitcoin’s liquidity has made it an attractive option for these sales, similar to what has historically happened with gold.
Potential for $100,000 Bitcoin
As 2023 comes to a close, many of the macro events mentioned by Back have subsided, along with industry-specific failures being resolved. This has resulted in a recent price surge for Bitcoin.
Back believes that Bitcoin could reach $100,000 even before the ETF (Exchange-Traded Fund) and before the halving event. He emphasizes that the ETF should not be underestimated in its influence on Bitcoin’s price.
Limited Access for Traditional Market Players
One key reason for Bitcoin’s potential growth is that major fund managers like BlackRock and Fidelity are currently not allowed to invest directly in assets like Bitcoin. This restriction could change in the future, opening up new opportunities for Bitcoin.
Hot Take: Bitcoin’s Resurgence in 2024
Despite the challenges faced in recent years, including global crises and market uncertainties, Blockstream CEO Adam Back is optimistic about Bitcoin’s future. He believes that 2024 will mark a resurgent period for the cryptocurrency, with the potential for significant price increases. Back attributes the previous decline in Bitcoin’s value to various “biblical” events, such as the COVID-19 pandemic, inflation, and wars.
As these events wind down and industry-specific failures are resolved, Back expects fewer surprises and a more stable environment for Bitcoin. He highlights the potential influence of an ETF and the growing interest from traditional market players as factors that could further boost Bitcoin’s price. With these factors in mind, Back suggests that Bitcoin could even reach $100,000 before the halving event.
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