$100K BTC? Don’t underestimate the impact of Bitcoin ETFs, says Adam Temeles

The Covid-19 pandemic, rampant inflation, and regional conflicts have directly impacted Bitcoin (BTC) price declines over the past two years. However, 2024 promises to be a time of resurgence, according to Blockstream CEO Adam Back.

A cryptographer who pioneered the proof-of-work algorithm implemented in the Bitcoin protocol tells Cointelegraph that the leading cryptocurrency has halved from past mining rewards events, below its historical price trend.

“Biblical” events have affected Bitcoin

As the next half approaches, weigh in on the potential price action of Bitcoin, which will see Bitcoin miners' block reward reduced by 6.25 BTC to 3,125 BTC. The reward halves will be programmatically combined into bitcoin code after 210,000 blocks.

Retracement shows that past market cycles and half-overlaying averages show that Bitcoin's relative price follows widely accepted forecasts. A number of events have played a role in lowering the price of BTC seen in traditional financial markets.

“The past few years have been like a biblical pestilence and pestilence. There were wars affecting covid-19, quantitative easing and energy prices. Inflation is bankrupting people, bankrupting companies.

The impact has had a significant impact on markets and portfolio management, according to Back. Investment managers have had to manage risks and losses in the past few years, which has forced the sale of more liquid assets.

“They have to cash out, and sometimes they sell a good thing because it's liquid, and Bitcoin is very liquid. It used to happen with gold, and I think that's the reason for Bitcoin in the last couple of years,” he explained.

Bitcoin had reached $100,000.

In the year As 2023 draws to a close, many of these macro events you mentioned in the past have wound down, with more industry-specific downsides unleashed. This is reflected in Bitcoin's recent price increase since November 2023.

“The wave of contagion, the companies that went bankrupt due to exposure to Three Arrows Capital, Celsius, Blockchain and FTX – that's mostly done. We don't think there are many more surprises in store,” Buck said.

Related: Blockstream Targets Series 2 Bitcoin Mining Continues With Basic Note

Blockstar's CEO previously predicted that Bitcoin would reach $100,000 in the next market cycle and returns to this point. He believes that BTC would have hit this mark if not for the previously mentioned macro factors.

He later cited Bitcoin's “stock-to-flow” model created by anonymous former institutional investor PlanB as a reference point for Bitcoin's reversal in 2024.

If you want to know more about bitcoin stock-to-flow:* This is the first article of 2019, or watch this YouTube video: pic.twitter.com/Qp8SjqtXIB

— PlanB (@100trillionUSD) December 5, 2023

Back Planby's model and heuristics suggest that savvy Bitcoin investors bought BTC six months before the halving event and sold during the 18-month price spikes that followed the fall in mining rewards.

“People thought it was a little crazy that we could get a $100,000 pre-half because I said it when the price was around $20,000.”

Hitting $44,000 several times in December 2023 suggests that the price of Bitcoin may not be so far off as his earlier prediction.

The result of the Bitcoin ETF

Prominent investors and market analysts have highlighted the possible consequences of the United States Securities and Exchange Commission's (SEC) approval of multiple Bitcoin Exchange Traded Fund (ETF) applications.

People ask me if we changed our luck. No, we're still lining up for January 10th (known as this cycle) with the same odds we've had for months (preferably/safely) with 90% approval odds. What we're looking at now: More updated/final filings and more clarity on cash and cash https://t.co/uiWgfxOfzz

— Eric Balchunas (@EricBalchunas) November 29, 2023

Senior EFF analyst Eric Balchunas has suggested these applications to get the green light as early as 2024. Michael Novogratz, founder of Galaxy Digital, also predicted an influx of institutional investment into BTC-backed products.

“I think Bitcoin can reach $100,000 before the ETF and even before the decline. But I definitely think it shouldn't be lower because of the impact of the ETF.”

A key reason cited by Bitcoin advocates is that entire segments of traditional markets, including major fund managers like BlackRock and Fidelity, simply aren't allowed to invest in assets like Bitcoin.

Related: Bitcoin ETF Will Drive Institutional Adoption in 2024 — Galaxy Digital's Mike Novogratz

“If you manage a mutual fund, they have rules imposed externally or as part of their fund that you can only buy things like public stocks and ETFs. For starters, you can't buy precious metals in person. You can't do any of these things,” Buck said.

This position is a relevant reason why Bitcoin ETFs are bringing significant capital inflows into the space. Back adds that the investment vehicle will open up access to Bitcoin exposure for many types of funds, especially those interested in doing so through Fidelity or BlackRock rather than a cryptocurrency exchange in the US.

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