According to the CEO of investment firm Morgan Creek, Mark W. Yusko, Bitcoin will reach $100,000 after the new halving expected in 2024.
Bitcoin hits $100,000 after fourth halving
Predicting Bitcoin’s future performance has always been a popular exercise among both industry experts and ordinary investors. But as is often the case in such cases, the predictions have rarely turned out to be correct, be it in terms of time frame or intensity. Certainly, cryptocurrencies have shown enough volatility that it is becoming increasingly difficult to make predictions.
However, some of the predictions heard in recent months said that Bitcoin would reach $1 million in value within a few years, such as that of the former CEO of Bitmex Arthur Hayescertainly seemed to be a true hype.
The CEO of Morgan Creek, an investment and wealth management firm, is also used to making predictions about Bitcoin that have almost always turned out to be far-fetched. Like the ones he made December 2019, when he predicted Bitcoin would hit $100,000 by 2021 (actually, it’s not like he went too far considering it hit $70,000 in November) and 500,000 within ten years. Or like the one from last year when he said he was sure Bitcoin would hit $250,000 by 2025.
The founder of the same fund, Anthony Pompliano, after years of supporting the cryptocurrency and making huge predictions about its future prices, said that BTC showed him that “price predictions are a fool’s game”. But apparently the CEO of his former company doesn’t seem to agree, considering he made a new prediction just in the last few days, namely that the Bitcoin price could reach $100,000 by the next halving, which is expected in 2024.
At a recent event, Yusko, who has always been one of the most optimistic about Bitcoin’s future prices, pointed out that, in his opinion, the next bull run won’t happen exactly before 2024, which coincides with the next halving and the reduction in rewards, expected for bitcoin miners for their block validation work. This event is repeated every four years as envisaged by Bitcoin founder Satoshi Nakamoto.
In early 2009, 50 BTC was distributed as a reward for each mined block. A reward that later halved every four years. Currently, the reward for each mined block (one every 10 minutes or so) is 6.25. In 2024 there will be 3,125, and so on until the last of the projected 21 million Bitcoin is mined.
Fair value of Bitcoin according to Morgan Creek
At the same time, Morgan Creek’s CEO has also argued that the current price is well below its fair value, which should be around $30,000. According to Yusko, the so-called cryptocurrency winter may have ended and a new phase may begin.
Yusko said:
“So I will pretend that spring has come. If you look at the last two cycles, we have the same number of days in this cycle that spring began and winter ended. Spring could last months. We don’t need to have an instant bull market.”
The fact that Yusko predicts the next bull run exactly with the new halving is by no means coincidental, considering that many analysts and pundits coincide exactly with the halving of expected earnings every four years, with an upward movement in prices. The surge in bitcoin and the overall market usually occurs around a year after the halving.
This was the case in 2013, after the first halving in 2012, when BTC surged from $13 to over $1100. Which was repeated on time in 2017 with Bitcoin’s first real and powerful bull run, taking prices above $20,000 for the first time, only to collapse to just over $2,000 in a matter of months. And the same thing happened in 2021, after the third halving of 2020, when Bitcoin’s insane run reached nearly $70,000.
The relationship between the halving and the price of bitcoin
The price surge will coincide with the fact that the halving will dramatically reduce Bitcoin’s inflation, just as predicted by its founder, who said among the primary uses of its digital currency was to be a hedging tool against inflation, on par with and more than safe -Port assets such as gold.
In other words, the Bitcoin halving has the effect and goal of reducing the amount of new Bitcoins generated per block. This means that the supply of new Bitcoins will inevitably decrease even though demand remains virtually unchanged, theoretically generating a smaller supply relative to demand.
In normal markets, a lower supply with stable demand usually leads to higher prices. And that is why strong increases in Bitcoin can be expected after a certain time after the halving.
There is a well-known crypto influencer who goes by the name Plan B, who has become almost a mythological figure precisely because of his many pinpoint predictions about Bitcoin, who has created a price prediction model based on this particular aspect. This model relates the amount of newly issued bitcoin (A) to the amount already available (B). What is generated is the scarcity rate specified by B/A. In the case of Bitcoin, component A decreases with each halving, increasing the scarcity rate. The theory is that as the scarcity rate increases, the price will adjust very quickly to continue to meet demand.
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