Source: The Block
Compiled by: BitpushNews Mary Liu
The price of Bitcoin has hit a record high in the past week since Donald Trump won the 2024 U.S. presidential election on November 5. According to market data, on election night, the price of Bitcoin broke through the previous all-time high of $73,730. As of press time, BTC trading prices fluctuated between $88,000 and $89,000, and once hit a high of $90,036.17 that day.
With the positive impact of Trump’s election, the expectation that sovereign nations may follow the United States in establishing strategic Bitcoin reserves, and the easing of interest rates, how long can the post-election Bitcoin surge last?
“Don’t fight the trend,” Bernstein analysts told clients in a note. “Welcome to the crypto bull run — buy everything you can.”
Bernstein and Standard Chartered Bank expect Bitcoin price target to reach $200,000 by the end of next year, but first, how long will it take for BTC to break $100,000?
Polymarket users have placed bets on whether this goal will be achieved by the end of 2024, with total trading volume as of today exceeding $3 million, giving the bet a 59% probability.
Michael Cahill, CEO of Douro Labs, told The Block: “Bitcoin reaching $100,000 is not a question of if/if, but a question of when. In my opinion, this could be as early as the first quarter of 2025. We are seeing unprecedented momentum due to the current macro environment being favorable for digital assets.”
Fear, or not fear?
According to Cahill, the post-election rally is not simply FOMO, but he said current prices are not just retail-driven speculation like in 2017.
He said: "The market has finally recognized Bitcoin as a legitimate asset and a tool to hedge against inflationary pressures. Today, we see a structural shift in investors' views on Bitcoin. The foundation for a six-digit price has begun to be laid. This rally has the potential to consolidate Bitcoin's position as the cornerstone of the global financial system."
Bitwise Chief Investment Officer Matt Hougan said that since breaking through $74,000, BTC has been waiting for the next trigger point before reaching $100,000, a level he said Bitcoin could "easily" reach by the end of the year.
“Everyone is paying attention to new Bitcoin buyers. That’s very real, but another reason for this rally is that people have stopped selling,” Hougan said. “Long-term holders are no longer willing to sell Bitcoin at current prices, and the bears don’t seem to want to stand in the way of this high-speed train.”
Chandra Duggirala, CEO of Tides.Network, said that the price of Bitcoin could easily reach $100,000 before Thanksgiving, but there are risks in the short term.
“We don’t see strong FOMO from wealth managers, and retail investors are just starting to take notice,” Duggirala said in an email. “So this trend is still in its infancy. We believe real FOMO will come once $100,000 is breached.”
Zaheer Ebtikar, founder and chief investment officer at Split Capital, echoed the same sentiment.
“Historically, people have also been forced into this narrative or this idea that the moves in Bitcoin do happen when they break out to all-time highs, so I think it’s a bit self-fulfilling, but I think more importantly… a lot of smarter money and a lot of crypto natives are grabbing the capital that could come into the space in the future,” Ebtikar told The Block.
He noted that this would not happen immediately if people handed their money over to professional asset allocators. Therefore, most of the FOMO would not really materialize until December 1st at the earliest, with January 1st, 2025 looking more realistic.
“I think we’re in a very strange window where a lot of sharp money that can move money quickly is coming into the market, and that’s happening before more systematic buying comes into the market,” Ebtikar said.
What does the smart money think?
Two Prime CEO Alexander Blume said that the price of Bitcoin could “without a doubt” reach $100,000 by the end of the year.
“BTC’s implied volatility is 55,” Blume said. “While a bit high, I expect it to go higher before reaching a market peak. This, along with the recently re-emerged lending market, tells me that there is still some room to run.”
According to data from CF Benchmarks, traders appear to be snapping up Bitcoin call options with a strike price of $100,000. The 30-day constant expiration 25 delta skew has now broken through the 5 vol threshold (Note: 5 vol is an empirical value. When the skew value exceeds this threshold, it is generally considered that the market's expectations for an increase are very strong), which the company said is close to the high so far this year, indicating a significant increase in demand for upside exposure.
In addition, CF Benchmarks product head Thomas Erdösi said in a statement that for call options with ultra-high strike prices in the long term, such as the 5D option with a current strike price of more than $100,000, the implied volatility is significantly higher, indicating that traders are preparing for a further break through the six-digit mark.
Wintermute data showed that open interest on Dec. 27 showed increased demand for call options with a strike price of $100,000, which would reach a notional amount of $850 billion.
The March 28 contract showed increased demand for strike prices between $100,000 and $120,000 by the end of the first quarter of next year. The ETH/BTC spot rate rose 11% over the past week, the third-largest gain this year.
“As has been pointed out throughout 2024, this spread has been diluted at every opportunity,” said Jake Ostrovskis, OTC trader at Wintermute. “The general sentiment is ‘this time it’s different,’ which is a dangerous position to be in and the market has softened somewhat since Friday’s high.”
Standard Chartered analyst Geoffrey Kendrick said that the $90,000 level is “easily achievable” by November 29, while $100,000 is expected on December 27 and $125,000 by the end of the year. He highlighted December 10 as an important date to watch because Microsoft’s board of directors will vote on whether to invest in BTC.
“…after the 2016 election, a lot of Trump trading peaked around the inauguration on January 20th, so if BTC doesn’t hit 125k by December 31st, I think it will hit it by January 20th,” Kendrick wrote in a Nov. 10 email to clients.
"It will reach $100,000 by the (Trump) inauguration at the latest," Matt Klein, portfolio strategist at Nascent, told The Block. "The only question is whether the Lummis Act is worth serious consideration. If the Lummis Act becomes law, there is no limit to the increase."
Earlier this year, Sen. Cynthia Lummis (R-Wyo.) introduced a bill that would require the U.S. Treasury to purchase 1 million bitcoins over five years to counter the impact of a falling dollar. She also introduced a stablecoin bill in April.
With anti-crypto figures like Senator Sherrod Brown losing the election, the U.S. Congress will have the most pro-crypto lineup in history. Coupled with Trump's economic policies that could devalue the dollar, Arthur Hayes believes Bitcoin will "fly higher."
“As the free-floating supply of Bitcoin decreases, historically more fiat currencies are going to chase a safe haven, and not just Americans, but investors around the world, including people in China, Japan, and Western Europe, are going to put money into Bitcoin… That’s why Bitcoin is going to $1 million, because the price is priced by the margin. Buy and hold,” Hayes said.
