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Judging from the recent price actions in the crypto market, every crypto enthusiast has their eyes on bitcoin’s price. Big celebrity figures like Mike Novogratz believe the crypto will hit $100k per unit soon. The overconfident die-hards even see the growth in price extending to infinity. While infinite growth in price seems unlikely, $100k is a lot more possible.
Several analysts worldwide regularly give their opinions regarding BTC hitting the $100k mark, several being positive. They have fronted strong arguments to support their positions which the article shall expound further on them.
It is, however, only fair to note that many analysts view such Bitcoin prices as being highly unlikely. They also have given their reasons, key among them being the capital investment required to drive prices to $100k. Large institutional investment or huge retail investment would be needed. Given the prevailing market conditions, it seems unlikely to happen according to them.
Analysts’ Opinions as to Why Such High Prices are Possible
Putting the views of its unlikelihood, below are the reasons as to why a BTC might clock the $100K mark;
4-year Price Raise Cycles
Bitcoin may be able to hit the $100k figures thanks to its price hike cycles. On every fourth year, the prices get a huge boost in growth. Price growth then stabilizes, at times reducing a bit before the next fourth year when it gets a boost.
The price hike cycles sometimes happen during the bitcoin halving event, during which the network cuts mining rewards in half. In doing so, several other factors affecting the price of BTC also change.
First, the inflation rate of bitcoin is cut in half and the rate of bitcoins entering circulation halves. The mining reward directly influences both factors. Since the total supply lowers, demand exceeds supply resulting in a higher valuation. Analysts believe that the next halving event may push prices beyond the $100k.
Global Pandemic Push
Cryptos have benefited a lot during the Covid 19 induced economic downturn. The demand for an alternative investment avenue capable of sustaining its value pushed investors to cryptos.
The investment push has been so conducive to cryptos that bitcoin outperformed gold in 2020. Its performance is estimated to have been up to 10 times better than gold during the period.
While economies have been recovering all over the globe, the demand for cryptocurrencies hasn’t crashed. Bitcoin has experienced a slight pullback in prices recently from its all-time high of $65,000 in April. Its prices plunged to $30,000 on the 18th of May 2021.
Prices are regaining their upward momentum and now hover at around $47,000 at the time of writing. Analysts believe the gains benefit from the earlier pandemic push, which introduced many institutions to the crypto. Tesla, for instance, bought BTC worth $1.5bn.
Changing Perceptions by Some Governments
While bitcoin is an excellent investment and a cost-free means of sending money, it has struggled to fulfil one key role. Most countries don’t recognize it as a unit of exchange. The failure to do so puts a low ceiling on its expansion and universal adoption. It also ensures that its use cases are limited.
Change is in the air regarding perception by governments. El Salvador recently became the world’s first government to adopt bitcoin as its official currency. Such recognition may boost the coin’s usage and adoption by a huge margin.
The growth in usage and adoption will increase the demand for bitcoin. The supply of the coin is, however, quite limited, which will drive the prices high. The price growth could push BTC’s value to the $100k mark.
$100k is Possible
The bitcoin halving event has proven to be effective in driving up BTC value for every four-year cycle. For every next four-year cycle, there has been a boom and bust cycle.
When one couples this with the boost from the pandemic-driven demand and improving government perception, prices won’t remain static. Investors can make a strong argument that BTC prices will likely breach the $100k mark.
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