- Bitcoin has been locked in the rangebound accumulation since the summer.
- Market observer cites key factors that could propel Bitcoin higher.
- There’s uncertainty over the impact of the US elections on Bitcoin’s price.
Bitcoin has struggled to stay above $65,000 since the summer.
Its price has been locked in a choppy sideways movement since peaking at $74,000 in March.
Still, one market observer feels Bitcoin could escape these doldrums and even hit the $80,000 level before year-end.
That’s if three conditions are met, according to Matt Hougan, chief investment officer at crypto fund manager Bitwise.
Here are the stars that need to align for Bitcoin.
Democrats don’t sweep
Crypto’s current lull has been attributed to uncertainty over the coming US elections in November.
Republican presidential nominee Donald Trump has overtly courted the crypto industry in this election cycle despite his negative attitude towards the market during his first term.
Democratic Vice President Kamala Harris, by comparison, has been slow to embrace the industry and instead has made vague references about how the US should maintain a competitive edge in both crypto and artificial intelligence.
Meanwhile, crypto luminaries have criticised the Biden Administration for what they view as its unfair targeting of US companies.
“To thrive, Bitcoin doesn’t need politicians,” Hougan wrote in a blog on Wednesday. “It just needs them to get out of the way.”
Hougan added that any outcome other than a clean sweep for Democrats in both Houses of Congress and the presidency would be a positive result for Bitcoin.
Meanwhile, Bernstein research analysts say Bitcoin will do well regardless of the election’s outcome.
Still, the analysts predicted Bitcoin to continue being locked into the current sideways price movement unless the market senses better odds for a Trump win.
The analysis puts Bitcoin reaching as high as $90,000 following a Trump win but a possible short-term plummet to $40,000 if Harris emerges victorious.
Loosening fiscal policies
Bitcoin also stands to rise amid a changing global fiscal climate. Both the US and China have recently enacted more liberal monetary policies.
In September, the US Federal Reserve slashed interest rates for the first time since the Covid pandemic.
Then, China followed suit with a massive economic stimulus of $282 billion to trigger growth.
Those actions prompted a minor crypto rally that saw Bitcoin cross $66,000 in late September but was ultimately cut short by renewed tensions in the Middle East.
Hougan wrote that the market is “hungry for more” of these more liberal monetary policies.
No black swans
The third condition? No black swans before year-end, or unforeseen events with the potential for huge consequences.
As Hougan wrote, “Crypto’s history is unfortunately beset by countless such surprises.”
Bitcoin’s potential to reach $80,000 could be hampered by major shocks such as hacks or massive lawsuits.
And during the summer, Germany sold $2.3 billion worth of Bitcoin, prompting a 25% price slump.
The US holds even more in seized Bitcoin, about $13 billion worth, and a decision to sell off the hoard in this final quarter could send the market spiralling and scupper any chances of setting a new peak this year.
“If we can make it through the end of the year without similar shocks, I’d expect new all-time highs and beyond,” Hougan wrote.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
