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Bitcoin could rise to $180,000 by 2025 if the top cyclical indicators remain muted, according to Matthew Sigel, Head of Digital Asset Research at VanEck. Speaking to podcast host Natalie Brunell, Sigel identified a clear four-year pattern in Bitcoin’s price action that he believes has persisted through multiple market cycles.
Why $180,000 per Bitcoin seems reasonable
Sigel explained that Bitcoin tends to outperform all other asset classes for three years in each four-year halving cycle, followed by a deep correction in the fourth year. Referring to declines that typically range from 60% to 80%, Sigel said that these declines usually come about two years after the BTC halving event.
Since Bitcoin’s last decline occurred in April 2024, Sigel sees 2024 and 2025 as potentially strong years. “That year was typically the second year after the halving,” Sigel explained. “Bitcoin’s decline happened in April of this year. So in 2024 [will be a] strong year, 2025 should be a strong year. I think 2026, unless something changes, will be a down year. “
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Using historical data, he recalled the lowest trough-to-peak appreciation in Bitcoin’s previous cycles, which was around 2,000%. Even if that number reaches 1,000%, Sigel indicated that Bitcoin could rise from $18,000 to as high as $180,000 in the current cycle. “So I see a profit of up to $180,000 this cycle, and I think that’s possible next year,” Sigel added.
He reiterated that Bitcoin’s volatility means that the price can exceed or decrease that value, but that $180,000 represents a reasonable target for 2024 if the pattern holds and there are no major “red light” indicators emerging.
Sigel broke down what he sees as the most important signs for traders to watch for. The first involves derivative funding levels: if the annual cost of holding Bitcoin positions in derivative markets exceeds more than 10% for more than a few months, Sigel considers that a red flag.
“Some of those indicators include subsidy rates. When Bitcoin’s funding rate exceeds 10% for more than a few months, that’s usually a red light,” Sigel warned and explained that recent market activity resets the currency higher: “[Last week’s] washout eliminated that too. So currency rates [are] it doesn’t really glow red.”
The second is the level of unrealized profit in the blockchain, where on-chain analysis can reveal that the cost of market participants is so low that taking a significant profit may create pressure to sell. “We don’t see shocking amounts of unrealized profits [yet],” Sigel noted.
Finally, he said anecdotal evidence of increased sales or speculation can turn on warning lights. He explained that if all these risk indicators will correspond to a certain price level – for example, if Bitcoin reaches $ 150,000 and these metrics point to the top of the market – he will be cautious. However, he said if the price reaches about $180,000 without those signs appearing, there may be room for more appreciation.
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“If we get to $180K and none of those lights are on, maybe we’ll let it go. If all those lights come on and the price is $150K, I won’t wait,” added Sigel.
The following are BTC Cycle Predictions
He also assessed the long-term growth potential of Bitcoin by comparing it to the market capitalization of gold. Because almost half of gold is used for industrial purposes and jewelry, he thought that the other half can be directly compared to Bitcoin’s function as an investment and a store of value.
If Bitcoin were to reach a rate comparable to that of gold’s market share, Sigel believes the price could reach around $450,000 per coin during the next cycle.
Taking an even more forward-looking view, he described VanEck’s long-term model in which the world’s central banks may end up holding Bitcoin as part of their reserves, even if it’s a 2% weighting. Since gold makes up about 18% of the world’s major banks’ reserves, Sigel’s assumption is that Bitcoin’s share will be very small in comparison.
He also expressed the hope that Bitcoin may one day serve as a currency to pay for global transactions, which may be among the emerging economic alliances such as the BRICS nations (Brazil, Russia, India, China and South Africa), which may advance its valuation. more. In VanEck’s calculations, this scenario could put Bitcoin at $3 million per coin by 2050:
“We also imagine that Bitcoin is used as a currency to pay for global trade, most likely in the BRICS countries. We reach three billion dollars a coin in 2050, which would be about 16% compounded annual growth rate.”
At press time, BTC traded at $107,219.
Featured image from YouTube / Natalie Brunell, chart from TradingView.com
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