With the highly anticipated Bitcoin halving just weeks away, industry pundit Mark Yusko, CEO of Morgan Creek Capital Management, is fueling the fire of investor excitement with a daring price prediction: Bitcoin reaching a staggering $150,000 by 2025.
Will Bitcoin Register A New ATH?
Yusko’s bullish outlook hinges on a combination of factors. He cites Metcalfe’s law, a network effect model, to estimate the top crypto’s current “fair value” at $50,000.
The upcoming halving, which cuts miner rewards in half, is expected to disrupt supply dynamics and historically has been followed by price surges. However, Yusko acknowledges the emergence of transaction fees as a new wrinkle, potentially mitigating the immediate impact of the halving on miner profitability.
This cycle might be a bit different, Yusko says, referring to the transaction fees generated by Ordinals and Inscriptions, a recent development allowing users to embed data onto the Bitcoin blockchain.
Bitcoin’s ‘Fair Value’
Despite this, he anticipates a fair value of $75,000 post-halving due to factors like increased investor interest and the “fear of missing out” (FOMO) that often accompanies such events.
Yusko isn’t alone in his optimism. Big names like Robert Kiyosaki and Standard Chartered bank share his belief in a potential $150,000 price target. This sentiment echoes the broader bullish trend in the crypto market, fueled by increasing institutional adoption and the growing recognition of Bitcoin as a potential hedge against inflation.
But not everyone is convinced. Bitcoin’s price history is notoriously volatile, and external factors like regulatory changes or economic downturns can quickly derail even the most well-reasoned predictions. Critics also point out limitations in applying Metcalfe’s law, originally designed for communication networks, to a complex system like Bitcoin.
Exact Price Trajectory UnclearThe road to $150,000 also remains unclear. While Yusko predicts a significant price increase after the halving, with a potential peak around nine months later (end of 2024), the exact trajectory hinges on a delicate balance between supply and demand.
Increased demand from institutional investors, particularly through vehicles like Bitcoin ETFs, could propel the price upwards. However, this needs to be met by a constrained supply due to the halving.
The price has to rise with more demand than supply, the analyst emphasizes, suggesting a potentially parabolic price movement towards the end of the year. Historically, Bitcoin price peaks have occurred around nine months after halving events, before a subsequent bear market sets in.
Featured image from Pexels, chart from TradingView