Markets
Several tailwinds could push Bitcoin to $100,000 this year as US inflation slows
The recent correction in the cryptocurrency market presents an opportunity for long-term investors, with key tailwinds that could propel Bitcoin to $100,000 by year-end.
That’s according to Matt Hougan, chief investment officer at crypto asset manager Bitwise, who laid out his reasoning in a recent investor article. note Wednesday, a day before official U.S. inflation data showed a decline in June.
Cash Entries in the United States Bitcoin Exchange-traded funds, post-halving supply shortages, the possible launch of Ethereum spot ETFs, U.S. Federal Reserve rate cuts and a changing political landscape in Washington could offer some respite from falling cryptocurrency prices, he said.
“The cryptocurrency market is currently facing a strange dynamic,” Hougan said. “All short-term news is bad, and all long-term news is good. This dichotomy creates an incredible potential opportunity for long-term investors.”
This comes as the U.S. Bureau of Labor Statistics reported The consumer price index (CPI) fell 0.1% in June on Thursday, after stagnating in May. This is the first decline in the index since May 2020.
“Tonight’s CPI release caught everyone’s attention,” QCP Capital wrote in a brief note Thursday. “This optimism has been reflected in the continued rise in stocks, but has not yet been factored into the cryptocurrency market.”
A slowdown in inflation could strengthen the Fed’s resolve to start cutting rates this year, which would benefit risk assets like Bitcoin.
This could happen as early as September, with traders anticipating an 84.6% probability of it happening, according to CME FedWatch. Tool.
The timing could prove opportune for investors as Bitcoin’s supply continues to dwindle following the halving, forcing miners to capitulate as the difficulty of operating the asset increases.
While the weight of Mt. Gox creditors and German Bitcoin sales are weighing on investor sentiment, it is unlikely to have much impact on ETF demand, Decrypt previously reported.
Since their launch in January, Bitcoin spot ETFs have generated about $15 billion in net new assets, but have yet to be approved for use by major wealth management platforms, including Morgan Stanley and Wells Fargo.
“When that happens – later this year, I think – we’ll probably see billions more coming in,” Hougan said.