Is $100,000 Bitcoin Possible? Analyst Breaks Down Major Catalysts

7 months ago

As Bitcoin (BTC) edges person to the $70,000 mark, the crypto assemblage is abuzz with predictions of a imaginable surge to $100,000, accompanied by a important altcoin season. Amidst this fervor, crypto expert Axel Bitblaze has provided an investigation connected X, examining whether the indispensable liquidity and catalysts are successful spot to propel Bitcoin to specified heights.

Bitblaze emphasizes the cardinal relation of liquidity successful the crypto market. Drawing parallels to erstwhile bull runs, helium notes, “Our abstraction is afloat driven by conscionable 1 thing, i.e., Liquidity.” He references the 2016 and 2020 bull markets, some of which were importantly fueled by expanding liquidity. This time, the question is whether akin oregon greater liquidity events are connected the skyline to thrust Bitcoin’s terms higher.

#1 Bitcoin Surge Set To Be Fueled By Stablecoins

A cornerstone of Bitblaze’s investigation is the existent authorities of the stablecoins market. He describes stablecoins arsenic “the gateway to the crypto industry,” underscoring their indispensability to the crypto ecosystem. The full marketplace capitalization of stablecoins has surged to $173 billion, reaching its highest level since the illness of TerraUSD (UST).

Tether (USDT) remains the ascendant player, comprising 69% of the full stablecoin marketplace headdress with $120 billion. Bitblaze highlights the humanities correlation betwixt BTC prices and USDT’s marketplace capitalization, stating, “Between March 2020 to November 2021, USDT MCap roseate by 17x portion BTC terms pumped by 16.5x.”

However, since March 2024, contempt USDT’s marketplace headdress continuing to rise, Bitcoin’s terms has remained comparatively stagnant. “This indicates there’s a batch of liquidity waiting connected the sidelines to participate BTC and crypto. I conjecture they’ll commencement deploying soon, right?” the expert states.

#2 FASB Rule Change

Another important origin is the impending alteration successful accounting standards by the Financial Accounting Standards Board (FASB). Currently, publically listed companies look challenges successful holding Bitcoin owed to unfavorable accounting treatments.

Bitblaze explains, “Let’s accidental a institution bought 100 BTC astatine $67,000 each. If BTC drops to $60,000 and past pumps to $68,000, the institution inactive needs to study it astatine $60,000… they volition person to amusement it arsenic a nonaccomplishment adjacent though it’s successful profit.” This results successful misleading net reports and adversely affects stock prices, discouraging companies from investing successful Bitcoin contempt its imaginable arsenic an asset.

The upcoming FASB regularisation change, acceptable to beryllium implemented successful December 2024, is poised to code this issue. Under the caller guidelines, companies volition beryllium capable to study the just worth of their Bitcoin holdings based connected marketplace prices astatine the extremity of the reporting period. Bitblaze suggests that this regulatory displacement could incentivize much corporations to follow Bitcoin arsenic portion of their equilibrium sheets.

He cites MicroStrategy arsenic a precedent, noting that since August 2020, the institution has accumulated 252,220 BTC worthy $17.4 billion, presently realizing a nett of $7.4 billion. With S&P 500 companies collectively holding astir $2.5 trillion successful currency and currency equivalents—assets susceptible to inflation—Bitcoin presents itself arsenic an attractive, inflation-resistant alternative.

#3 Expanding M2 Money Supply

Bitblaze besides delves into the macroeconomic landscape, peculiarly the M2 wealth supply, which includes cash, checking deposits, and different easy convertible adjacent money. Currently, the M2 wealth proviso stands astatine $94 trillion, astir 39 times the full crypto marketplace capitalization.

Bitblaze references an investigation indicating that “for each 10% summation successful M2 wealth supply, BTC pumps 90%.” Despite the M2 wealth proviso being astir 3% higher than its erstwhile peak, Bitcoin has yet to surpass its 2021 highs, suggesting that ample liquidity remains untapped.

“Currently, M2 wealth proviso is astir 3% higher than its past peak, portion BTC is inactive beneath its 2021 high. With Global complaint cuts happening on with QE, fiat volition go a worse investment. As Ray Dalio said, #Cash is Trash,# and present this gigantic wealth proviso volition find a mode into antithetic plus classes, including crypto; the expert claims.

#4 Shift From Money Market Funds To Bitcoin

Since November 2021, wealth marketplace funds person grown to $6.5 trillion arsenic investors sought the information of Treasury bills amid rising involvement rates. However, with the Federal Reserve initiating complaint cuts and signaling much to come, the yields connected T-bills are expected to diminish, apt causing a important outflow from wealth marketplace funds.

Bitblaze predicts, “This’ll origin a monolithic outflow from wealth marketplace funds arsenic the T-bills output volition diminish,” suggesting that investors volition question higher returns successful riskier assets specified arsenic Bitcoin and different cryptocurrencies. He refers to these integer assets arsenic “the fastest horses” successful a QE environment, forecasting that this displacement could transmission important superior into the crypto markets.

To quantify the imaginable inflow, Bitblaze aggregates the disposable liquidity sources: the M2 wealth proviso of $94 trillion, wealth marketplace funds totaling $6.5 trillion, currency holdings of S&P 500 companies amounting to $2.5 trillion, and the stablecoins marketplace headdress of $173 billion. This brings the full to astir $103.17 trillion, which is 43 times the existent full crypto marketplace capitalization.

He further addresses skeptics, concluded: “For a $200 Billion inflow, lone 0.19% of this relationship needed to participate crypto. For those who deliberation this isn’t imaginable and 200B is excessively much, BTC ETFs had implicit $20B successful nett inflows contempt sideways terms action, nary complaint cuts, and nary QE.”

At property time, BTC traded astatine $66,944.