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Historical trends say bitcoin is on pace to blow past record highs and hit $100,000 by 2025, according to a blockchain executive.
Joe Kelly, the cofounder and CEO of Unchained, a cryptocurrency financial services firm with $2 billion in assets under management, said bitcoin's prior three "halving" events — or when the number of bitcoins rewarded to miners gets cut in half — suggest massive upside for the token leading up to and after the next halving in April 2024.
Miners' rewards will be reduced from 6.25 bitcoin to 3.125 per block, creating a scarcity effect, according to the original whitepaper authored by Satoshi Nakamoto.
Each of the past three halvings correlated with new all-time highs hit within 12 months.
"Taking a conservative view," Kelly wrote in a note in August, "if bitcoin stays around $30K until the halving, even a 12-month post-halving increase of 250% — which, again, is conservative relative to previous halvings — would price bitcoin at $105K."
The exec pointed out that one year after the 2012, 2016, and 2020 halvings, the price of bitcoin was up 8,069%, 284%, and 559%, respectively.
He added that the world's most biggest crypto by market cap has also experienced sharp rallies leading up halving events, too.
In the 12 months before each of the last three halvings, bitcoin has climbed 385%, 142%, and 17%, respectively.
Fundstrat, meanwhile, published a note to clients in July that said bitcoin could hit $180,000 before the next halving, largely on the back of momentum from a potential crypto ETF from BlackRock.
"This [bitcoin ETF launch] would bring daily demand to $125 million, while daily supply is only $25 million," the Fundstrat strategists wrote. "The implied equilibrium price would need to rise so daily supply matches daily demand. Equilibrium analysis suggests that a clearing price is $140,000 to $180,000, before the April 2024 halvening."
Bitcoin's total supply is capped at 21 million, and each halving brings the blockchain closer to that level. Halving happens every 210,000 blocks mined, or about every four years, with the most recent one occurring May 11, 2020.
Barring surprises, the final halving event should take place in 2140.
Bitcoin has surged more than 120% in 2023, recovering from last year's 65% sell-off. The rebound has coincided with historic interest rate hikes from the Federal Reserve, as well as a series of bank failures that began with Silicon Valley Bank.
Separate from the halving event, recent speculation about the Securities and Exchange Commission's potential approval of a spot bitcoin ETF has fueled bullish sentiment.
Meanwhile, any easing of monetary policy in 2024, according to Kelly, could provide a further boost for crypto.
"While past price activity suggests good odds, there is of course no guarantee that the next bitcoin halving will indeed drive an [all-time high]," Kelly said. "Mining rewards are not directly tied to market demand and other macroeconomic factors, including a rising interest rate environment, could deter investors from buying bitcoin."
