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1 Best Cryptocurrency to Buy Before It Soars 150% in Second Half of Year, According to a Pair of Wall Street Analysts
Another big rally could happen for this popular cryptocurrency.
The cryptocurrency market is highly volatile. This can lead to staggering drops in value, but it can also produce astonishing returns in a short period of time.
Bitcoin (BTC 3.09%) hit a new all-time high earlier this year, amid the new commercial hype Bitcoin ETFs coming to market. The largest cryptocurrency on the market has seen its value increase by 177% from its October lows to a March high of $73,750. It has since fallen to around $60,000 per Bitcoin at the time of writing.
A pair of Wall Street analysts think Bitcoin could be poised for another price surge in the next six months, hitting $150,000 by the end of 2024, a 150% increase. Fundstrat’s Tom Lee and Standard Chartered’s Geoff Kendrick expect the cryptocurrency to surpass its all-time highs later this year.
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Bitcoin’s Most Recent Challenge Is Almost Behind Us
The price of Bitcoin is mainly determined by supply and demandEarlier this year, the Bitcoin Halving has reduced the rate of increase in the cryptocurrency’s supply. Previous halvings have been bullish for Bitcoin, as demand growth outpaces supply growth. However, another large influx of supply remains a challenge for Bitcoin’s price.
Just days after the last Bitcoin halving, the defunct Bitcoin exchange Mt. Gox, which filed for bankruptcy protection in 2014, delivered some good news to its creditors. Mt. Gox was once the world’s largest Bitcoin exchange, but it suffered a devastating hack in 2014, resulting in the loss of more than 850,000 Bitcoin. In April, Mt. Gox’s trustee said it would begin returning some of the lost funds by October.
In late June, the trustee announced plans to begin disbursements in July. Two years ago, the Mt. Gox trustee held 142,000 Bitcoin, worth over $8.5 billion at today’s price. If creditors receiving their Bitcoin decide to sell, it could put enormous downward pressure on the price of Bitcoin. This potential selling pressure has been incorporated into the price of Bitcoin in recent months.
But demand for Bitcoin is mostly based on future expectations. And the Mt. Gox deal is almost over. Lee says that’s a reason to invest in Bitcoin now. “That was a huge overhang for many years,” he said in an interview with CNBC. “But if you were investing in cryptocurrency, knowing that one of the biggest overhangs is going to go away in July, I think that’s a reason to actually expect a pretty sharp rebound in the second half.” He says $150,000 for Bitcoin is still possible by the end of the year.
Kendrick believes that macro events such as the US elections could play a significant role in the price of Bitcoin later this year. He sees a scenario where the cryptocurrency hits $100,000 by Election Day and $150,000 by the end of the year.
This major source of demand will push Bitcoin higher
The main potential driver of Bitcoin’s price appreciation in the long term is the asset’s growing adoption in institutional portfolios.
New Bitcoin spot ETFs approved in January will usher in a new, easier way to institutional investors to invest in cryptocurrency. Many hedge fund managers jumped on the opportunity. They had invested $4.2 billion in Bitcoin Trust in Grayscale (GBTC -0.12%) and another 3.2 billion dollars in iShares Bitcoin Trust (IBITS -0.12%), at the end of the first quarter, according to documents filed with the SEC.
Bitcoin ETF inflows declined in the second quarter, but the potential for broader adoption among institutional investors remains. Cathie Wood’s Ark Invest predicts that Bitcoin will play a major role in institutional investor portfolios going forward. Analysts estimate that a 1% allocation of investable assets to Bitcoin will push the cryptocurrency’s price to $120,000, but they see the potential for a much higher allocation.
As more institutions push demand higher and supply growth continues to slow, there is plenty of room for the price of Bitcoin to rise. Whether it will hit $150,000 by the end of the year is hard to say. But the cryptocurrency has a history of making big moves in a short amount of time. If you are bullish on Bitcoin, the best time to invest is now.
Adam Levi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.