🔥 Bitwise shared a commentary on the BTC situation from now until the end of the year with the title:
Q4 Melt-Up: Roadmap to Bitcoin 80K and Beyond
Let's take a look at the 3 catalysts for Bitcoin's growth shared by Bitwise.
Conditions for Bitcoin to reach $80,000
1️⃣ Election: Anything but a complete Democratic victory
The US election is a big event for crypto. Most people think there are only two possible outcomes: Trump = Good, Harris = Bad.
Certainly, a Republican victory would be a boon for crypto, given the party’s strong and growing support for the crypto sector. However, the situation on the Democratic side is more complicated.
Democrats have a wide range of views on crypto, from Senator Elizabeth Warren with her “Anti-Crypto” camp to Representative Ritchie Torres with his deep support. The problem over the past four years has been that Warren’s wing has controlled policy and appointed agencies, creating a hostile environment for the industry.
Bitcoin doesn't need politicians to thrive, it just needs them to not stand in its way. Unless the Democrats win both houses of Congress and the White House, I expect them to take a more neutral approach to the industry.
Now, Democrats have begun to change their perspective, as in a recent statement by Maxine Waters, the top member of the House Financial Services Committee, when she said that “crypto is inevitable.”
Bitwise thinks that attitude is enough to get us to $80K. (Polymarket puts the odds of a Democratic outright victory at 20%.)
2️⃣ Economy: Two Rate Cuts + More Global Stimulus
The number one reason people are attracted to Bitcoin is simple: The dollar will be inflated. This idea helped launch Bitcoin in 2008 and is still a powerful driver of crypto today. Even BlackRock is using this idea in its marketing campaigns for Bitcoin.
That’s why crypto surged when the Fed cut interest rates by 0.5% despite a growing US economy, and why it soared when China launched a 2 trillion yuan economic stimulus package in late September.
The market is crying out for more of the same. Right now, the market is expecting another 0.5% from the Fed before the end of the year and more fiscal stimulus from China.
If both play out, Bitwise predicts a strong rally in Q4. If not, disappointment could weigh on the market.
3️⃣ Crypto: No Big Negative Surprises**
The last thing we need for a rally to $80K is a period of no major surprises. No major hacks. No new major lawsuits. No large amounts of previously held BTC suddenly appearing on the market.
Crypto history is unfortunately full of such surprises. In recent quarters, Bitcoin payouts from the Mt. Gox exchange and from governments have contributed to the market's narrow range.
If we can get through the year without similar shocks, I expect new record highs and beyond.
❓What other factors can help? Altcoins
Some Bitcoin proponents may not like Bitwise saying this, but Bitwise thinks a broader rally in the crypto market would help complete this strategy.
Obviously Bitcoin doesn't need Ethereum, Solana, or new altcoins to succeed. In fact, it sometimes gets hurt by the problems in the altcoin market. But if we want a short-term bull run, say to $100K in a few months, it would be good to have some optimism in the market.
The last time Bitcoin had a prolonged period of slow-moving was from June 2019 to June 2020, when Bitcoin traded in a tight range of $8K-$10K (except for one dip during the COVID panic). It started to rise again in late summer 2020 and then went straight up to $60K. Much of that was driven by COVID-era stimulus, but some of it was driven by positive sentiment. Specifically, the “DeFi Summer” of 2020 gave investors a reason to get excited about crypto again, and the optimism spilled over to Bitcoin.
This year, these positive sentiments are scarce outside of Bitcoin. But they are surging in areas like stablecoins, where the total asset is heading to new record highs; new high-performance blockchains, where communities are gathering around projects like Sui, Aptos, and Monad; and innovative projects like Babylon, which is exploring ways for Bitcoin investors to generate returns from staking. Strong and sustained momentum in these areas would strengthen the case for Bitcoin.
ℹ️ Conclusion
Remember, Bitcoin has had a pretty good year, being one of the best performing assets in the world, up 49%, and there has been some incredibly positive news. We’ve seen Bitcoin ETFs launch and become the most successful ETF launches ever. We’ve seen significant institutional adoption, with 60% of the largest hedge funds now owning Bitcoin. And Bitcoin has entered the mainstream political conversation in a way that was unimaginable just a few years ago. Two years ago, FTX collapsed and Sam Bankman-Fried dominated the headlines; today, Larry Fink is on TV talking about Bitcoin taking over the world.
Bitwise suggests that these will get us to $80K (and beyond) next year, almost regardless of what happens in the news. But if we want to hit that target before the end of the year, all three of the above factors need to be in place.