- Bitcoin surged to a new all-time high on Thursday.
- Experts say the crypto could reach even higher before the end of the year.
- Here’s what they say is driving the rally.
The Federal Reserve announced new interest rate cuts on Thursday, which helped send Bitcoin’s price to just over the $76,800 all-time high.
Market watchers say the rally is just beginning, and predict that the cryptocurrency could hit between $90,000 and $125,000 before the end of 2024.
“We are entering the Golden Age of Crypto,” Matt Hougan, Bitwise’s Chief Investment Officer, wrote in a blogpost on Wednesday.
Here are four drivers experts say will push Bitcoin’s price to the next level.
Donald Trump
Donald Trump, who championed a more crypto-friendly platform in the run-up to Tuesday’s US presidential election, claimed a landslide victory over Kamala Harris.
With confidence in a pro-crypto administration, buyers flooded in, propelling Bitcoin above the $76,000 mark for the first time.
UK bank Standard Chartered predicted this week that Trump’s win will catapult the price to $125,000 before the end of the year.
Industry leaders like Galaxy Digital CEO Mike Novogratz are optimistic that restrictions on stablecoins and limiting banks’ services to crypto firms will be “repealed very quickly.”
Trump is also expected to dismiss Securities and Exchange Commission Chair Gary Gensler, who has aggressively pursued lawsuits against major industry players like Coinbase and Ripple.
Novogratz predicts this shift will “unleash a tsunami of institutional participation.”
High demand
The institutional demand was evident on Wednesday when US spot exchange-traded funds enjoyed a record-breaking daily inflow of almost $1.4 billion.
A growing number of big institutions and hedge funds have taken positions in Bitcoin, creating what BTC Markets CEO Caroline Bowler describes as a “feedback loop” where inflows drive prices higher, attracting even more capital.
This compounding effect has the potential to attract “trillions of dollars of institutional assets that currently have 0% exposure to crypto,” Hougan said.
China and the Fed
Bitcoin bulls are also rejoicing as the Federal Reserve and China are poised to inject fresh liquidity into global markets.
The Fed’s latest quarter-point rate cut on Thursday, following a 50 basis-point cut in September, is expected to continue lowering borrowing costs and boost liquidity.
Meanwhile, China is ramping up its stimulus efforts, with insiders suggesting a potential fiscal package of up to $1.4 trillion to stimulate growth.
This combination creates a “Goldilocks scenario” that provides ideal conditions for risk assets, analysts say.
More liquidity hitting the market usually incentivises investors to bet on riskier assets like cryptocurrencies.
Arthur Hayes, cofounder of BitMEX, previously described the Fed and China’s combined actions as a “bazooka” of liquidity that could fuel a “glorious” Bitcoin bull market through 2025.
Crypto market movers
- Bitcoin is up 1.4% over the past 24 hours to trade at $76,020.
- Ethereum is up 3.9% to trade at $2,915.
What we are reading
- Who is Howard Lutnick? The Tether-backing Trump ally few in crypto have ever heard of — DL News
- The institutions are coming (for real this time) — Milk Road
- Solana Leaders Encourage Degen Chain to Migrate to Solana — Unchained
- Dogecoin rallies 8% as Elon Musk savours Trump triumph and eyes White House role — DL News
- Jack Dorsey’s Block to prioritize bitcoin mining and wind down decentralized tech arm TBD — The Block
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
