- A $100,000 Bitcoin has gone from a pipe dream just a few short months ago to a realistic target
- Institutional buying, a falling dollar, and the nature of market cycles all add up to $100,000 being a realizable figure
- Such a consideration was almost unthinkable in March
When Bitcoin dropped to $3,850 in March, the idea of a $100,000 price tag was as far away as the moon itself. Nine months later however, with institutions pouring in billions of dollars and a new market cycle just beginning, the landscape is very different, and a six figure Bitcoin is no longer a pipe dream but something of an expectation.
Institutional Buyers
Bitcoin ownership by public companies was put at $6.9 billion in mid-October, since when some $3 billion has been spent by institutions on accumulating Bitcoin, and that’s those that have come out publicly. Institutions are piling into Bitcoin in scarcely believable proportions, with every expectation that this will not only continue but increase into 2021.
When you compare this to all previous bull runs, which have been almost solely retail based, the level of money coming into the space is magnitudes higher than ever before. The demand for Bitcoin is heavily outstripping supply, and when you have buyers ready to throw hundreds of millions of dollars at it, suddenly $100,000 doesn’t seem all that crazy.
Historical Patterns
The other thing to note about this cycle and the potential for Bitcoin to hit $100,000 is that we are starting the cycle at $10,000. It is of course dangerous to assume past performance will repeat, but a look at the Bitcoin weekly chart shows very clearly why a six figure Bitcoin is completely viable proposition:
While we can expect this bull run to be more extended than previous ones, a look at this chart, combined with the increased demand for Bitcoin, makes it instantly clear that a staggered run to $100,000 is, historically speaking, very likely.
Dollar Decline
Another factor that could precipitate a run to a $100,000 Bitcoin is a potential decline in the value of the dollar. The coronavirus pandemic, which shows no signs of slowing, has led to the U.S. printing some $4 trillion in cash, something that has not gone unnoticed by economists, institutional bosses, and the U.S. Dollar Index itself:
The dollar’s price has collapsed 13% since March, during which time Bitcoin’s price has increased around 4x, and it is now approaching critical four-year support. With a $900 billion stimulus package about to be signed and the virus mutating, there is little confidence that the dollar is going to reverse its decline anytime soon, which will only improve Bitcoin’s chances of reaching a $100,000 value.
$100,000 Bitcoin a Sign of the Times
The fact that we can consider $100,000 Bitcoin as a plausible target shows how far the ecosystem has come this year alone, with the huge institutional buyup being the catalyst behind this. Retail has yet to really enter the picture again in any meaningful way, and once they do it will likely be when Bitcoin has crossed the $50,000 mark, which will be an incredible marker in itself.
