Bitcoin’s Continued Inflation Will Be Key to Reaching $200K – Crypto Fund Manager
Bitcoin's price has soared in 2024, fueled by a number of spot exchange-traded funds (ETFs) and the asset's fundamental role as a store of value.
Demand for Bitcoin (BTC) is expected to continue, particularly as the US government's high spending and interest rate policy discussions intensify, Grayscale Research Director Zach Pandle said.
“We expect steady inflation and persistent budget deficits to contribute to demand for store-of-value assets like Bitcoin,” Pandl told Cointelegraph.
Predicting Bitcoin's future price remains challenging due to the many fundamental variables at play, but Jupiter Zeng, a partner at Hashkey Capital Liquid Fund, sees significant growth potential, suggesting that Bitcoin may reach $200,000 by the end of the year.
“The lowest forecast is $100,000, the middle is $140,000, and the highest forecast is $200,000, by the end of 2024,” Zheng explained in an interview with Cointelegraph.
The positive impact of ETFs on the crypto market has made crypto investments more accessible and attractive to a wider audience. In the long run, Bitcoin's price behavior will begin to mirror that of traditional assets such as equities and gold. This could lead to more stable growth and consolidation of core investment portfolios, he said.
The Bullying Case of BTC
Venture capitalist Tim Draper has predicted that by 2024 BTC will enter ETFs and triple the influence of the Bitcoin half.
Draper expressed his optimism about Bitcoin's direction in an interview with Cointelegraph at Paris Blockchain Week, reflecting on his earlier predictions and suggesting that it could rise to $250,000 by the end of the year given the positive signs he's seen in the market.
The introduction of spot Bitcoin ETFs in the United States has greatly renewed interest and capital investment in Bitcoin. The investment products have opened up a new avenue for Bitcoin-enthusiastic investors who may be alarmed by the prospect of holding BTC in self-storage and hedge against devaluing fiat currencies, Draper added.
Even in the worst case scenario, it is not too late to buy Bitcoin
While historical halvings provide some insight, the current situation presents a novel scenario, where ETFs are introducing more volatility to crypto prices due to volatile demand.
Bitcoin's recent volatility suggests that the market is adjusting to the new dynamics of supply and demand, especially with the introduction of global spot ETFs, which could significantly increase demand for Bitcoin in the coming months, potentially driving up its price.
Related: $250K Bitcoin? Tim Draper Says Halving, Bitcoin ETF Will Pick Up Demand
On the flip side, these investments can cost more volatility, as investors can move in and out of their funds more easily than they can hedging themselves.
CK Zheng, CIO at crypto hedge fund ZX Squared Capital, said:
“Our model costs $90,000. A more extreme scenario is $125,000, and the carryover is $50,000.
“The main reasons are the net income of the BTC ETF (as a measure of the TradFi adoption process), the reduction of the interest rate of the Fed at the end of this year, the halving of BTC in 2024 (creating a greater imbalance of demand and supply),” he said.
While it is difficult to predict the exact price of BTC at the end of 2024, there is a consensus among experts that the price will continue to trend upwards throughout the year. These predictions are based on the high returns to Bitcoin ETFs, the asset's quality as a store of value, and current macroeconomic conditions.
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This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
