Bitcoin is on track for its fourth consecutive month of gains, marking the longest such stretch since its six-month advance through March 2021.
The world’s largest digital currency saw a 2.5% increase on Sunday, trading at approximately $29,700 in New York. Other smaller cryptocurrencies like Ether, Binance Coin, and Cardano also experienced gains.
Bloomberg’s data reveals that four-month winning runs in Bitcoin have historically led to a 260% surge on average over the following year. Such an increase would propel Bitcoin to a record high of $105,000 from its current price of around $30,000, where its 80% rebound from last year’s crypto crash has stalled.
During Bitcoin’s resurgence, the narrative surrounding the cryptocurrency has shifted. It has drawn support from bets on the Federal Reserve’s move towards looser monetary policy, the perceived damage to fiat currency from the US banking crisis, and a planned reduction in the supply of new tokens through a process known as “halving,” set to take place next year.
Experts at Standard Chartered Bank, BCA Research, and Bloomberg Intelligence have all predicted possible routes for Bitcoin to reach at least $100,000. BCA’s Associate Vice President Juan Correa-Ossa wrote that Bitcoin could potentially usurp gold as a store of value in a digitalizing world, with Bitcoin’s price at $160,000 if it approached 25% of the market capitalization of gold. Bloomberg Intelligence’s Jamie Douglas Coutts suggested that if 1% of the global bond-market value were to move towards Bitcoin, the cryptocurrency’s price would increase to $185,000.
However, these projections are not guaranteed, and the cryptocurrency market remains vulnerable to various risks, including the US government’s crackdown on the sector. BCA’s Correa-Ossa added that a shorter-term threat would be if traders scaled back expectations of friendlier Fed policies. The outlook for both real and virtual assets is challenging due to various crosscurrents amid a period of heightened economic uncertainty. Bitcoin remains approximately $40,000 below its 2021 all-time high of nearly $69,000.