Hopes are high for Bitcoin after the halving. Is a new all-time high of $100,000 possible?

After Bitcoin (Bitcoin -0.78%) halved on April 19, crypto investors cheered. In their view, Bitcoin is now on a trajectory to rise from its current price of $65,000 to reach a price level of $100,000 at some point in the next 12 months.

But the decision whether or not to buy Bitcoin now may not be as easy as you think. Notably, several prominent Bitcoin bears have weighed in, claiming that the fourth halving may overpromise and underdeliver.

They are right? Let’s take a closer look at what to expect from Bitcoin in the post-halving period.

Bitcoin’s history

There were three previous Bitcoin halved events (in 2012, 2016, and 2020), and each led to a spectacular rally for Bitcoin. Therefore, there is plenty of precedent for Bitcoin to enter another rally in 2024. In the third halving cycle, Bitcoin’s price exploded from $10,000 to $69,000, so many investors are expecting the same kind of performance this time as well. .

But how much faith can we place in Bitcoin’s track record? After all, past performance is no guarantee of future performance. Furthermore, it may be the case that previous Bitcoin rallies have been correlated with other macroeconomic events rather than the halving itself. For example, the much-vaunted recovery from the 2020 halving aligned perfectly with the response to the COVID-19 pandemic and the massive amount of stimulus money flowing through the economy.

What’s different about the 2024 halving?

However, several key factors in Bitcoin’s favor lead me to think we can trust historical evidence again. On the one hand, there are new spot Bitcoin ETFs, which was released in January. This created a new demand for Bitcoin that never existed before. If investors decide to allocate at least 1% of their portfolios to Bitcoin, with the help of easy-to-use exchange-traded funds (ETFs), then this could be a source of stable, long-term demand for years to come.

In fact, all this new demand could actually lead to a “supply squeeze,” where there simply isn’t enough Bitcoin available for everyone who wants it. The total circulating supply of Bitcoin is limited to 21 million coins and there are already 19.7 million coins in circulation. The halving will put even more pressure on this supply as it will result in the rate of issuance of new Bitcoins being halved.

Therefore, the supply of new Bitcoins is decreasing exactly at the time when demand is at its highest. According to supply and demand calculations from the basic Economics 101 course, the price of Bitcoin is expected to increase.

The Bitcoin naysayers

If you’ve been following Bitcoin for a while, you probably know that there have always been prominent crypto bears who have loved poking holes in the Bitcoin narrative. And they all seem to have woken up from a long hibernation right around the time of the halving.

Image source: Getty Images.

In a recent interview with Bloomberg, Jamie Dimon, CEO of JPMorgan Chase (JPM 0.06%), called Bitcoin a “decentralized public Ponzi scheme.” In Dimon’s opinion, there is no inherent value in Bitcoin itself, and people are only buying Bitcoin because its price is rising. In fact, he even calls Bitcoin a “fraud” and says there is no hope for it as a currency.

Additionally, financial commentator and investment consultant Peter Schiff argues that Bitcoin is, well, broken. Transaction costs are still very high and transaction processing times are very long. Bitcoin is not yet widely accepted as a form of payment. When was the last time you used Bitcoin to pay for something? As a result, Schiff argues that you should buy gold, not Bitcoin.

Can Bitcoin reach $100,000?

Forget the naysayers, though. They have been making similar arguments about Bitcoin for over a decade. At the moment it seems like a unique opportunity to buy Bitcoin. Don’t let the $65,000 price fool you. Bitcoin is, at the very least, undervalued, not overvalued.

After all, we are only now seeing Bitcoin become popular. We just saw Wall Street firms launching new investment products aimed specifically at Bitcoin buyers. And we are seeing the beginning of a paradigm shift in the way people think about Bitcoin as an independent product. asset class which needs to be added to a portfolio for diversification purposes.

Long term, I’m bullish on Bitcoin and look forward to it hitting another all-time high in 2024. So no, Bitcoin’s value probably won’t collapse after the halving, as JPMorgan Chase recently warned. It will likely reach $100,000 soon, much to the consternation of Bitcoin bears everywhere.

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