Excessively high price estimates for Bitcoin (BTC) are more common than not in this industry. However, many analysts and investors believe that Bitcoin can rally to $100,000 within the next 12 months. Matt Hougan, chief investment officer at Bitwise, also believes that Bitcoin will rally above six figures.
Source: Matt Hougan
Let’s take a look at data that supports a Bitcoin price run to $100,000 and above.
Spot Bitcoin ETF inflows highlight strong institutional demand
Rising demand for spot Bitcoin ETFs, which have seen an impressive $2.11 billion in net inflows since Oct. 11, is one reason for BTC’s recent price strength. These ETFs, launched in January 2024, now hold over $60 billion in assets under management, indicating significant institutional interest.
US Bitcoin ETFs aggregate flows, USD. Source: Coinglass
From a macroeconomic perspective, Hougan points to the upcoming Nov. 5 presidential election in the United States. Republican presidential nominee Donald Trump has also expressed strong support for Bitcoin and the inclusion of cryptocurrencies in financial markets, while candidate Kamala Harris has projected a regulatory-friendly stance that could encourage the development of crypto projects and companies in the US.
Soaring US debt highlights a government overspending problem
US total public debt, USD billion. Source: luke_broyles
Hougan also emphasizes that the US government deficit has reached unsustainable levels, a situation made possible by the bipartisan agreement to raise the debt ceiling.
In just two weeks, US public debt surged by $500 billion, reaching an all-time high of $35.8 trillion. This excessive government spending weakens the US dollar, making scarce assets like Bitcoin, gold, and stocks more valuable. As a result, central banks may be forced to continue cutting interest rates to ease the government's debt repayment burden.
US public debt interest expense per day, USD billion. Source: Apollo Academy
According to Apollo data, interest expenses on US public debt have exceeded $3 billion per day. This situation puts the Federal Reserve in a difficult position, as lowering interest rates typically fuels inflation and risks overheating the economy. Hougan notes that recent economic stimulus packages announced by China are also contributing toward pushing Bitcoin’s price closer to $100,000.
Historically, Bitcoin has shown a positive correlation with global base money, as measured by the M2 supply, which includes bank deposits and money market funds. Increased liquidity encourages more risk-taking among investors. During periods of economic expansion, when recession risks are low, traders tend to seek higher returns beyond fixed-income investments.
Related: Trump election win could send BTC to $100K and propel altcoins further
Whales accumulating Bitcoin will cause a “supply shock”
Bitcoin exchange whale ratio chart. Source: Woominkyu
An analysis by Woominkyu, a verified author on CryptoQuant, illustrates that the current accumulation pattern resembles the ratio observed in July 2020, when Bitcoin's price surged by 550% in just six months.
Hougan highlights that Bitcoin accumulation by large holders has reached 1.6 million BTC over the past six months, according to CryptoQuant. This accumulation is creating a “supply shock,” as the supply of coins available for sale is unable to keep pace with the growing demand from institutional investors.
This article is for generd not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.