Bitcoin’s most recent rally has brought it within an arm’s reach of its all-time-high, but some experts say that this is just the beginning.
The most popular cryptocurrency surged as high as $63,100, according to CoinGecko, before slightly retreating on Friday afternoon. The coin is now up more than 30% year-to-date and nearly 170% compared to this time last year.
It is now only a few thousand dollars from its record high of $69,044 reached at the height of the crypto bull market in 2021, and experts predict this cycle could finally lift Bitcoin above the coveted six-figure mark.
The approval of mainstream financial institutions issuing ETFs, such as BlackRock and Fidelity, has helped drive investors to the cryptocurrency, Steven Lubka, managing director and head of private clients at Swan Bitcoin, told Fortune. The exchange-traded products have made it easier than before for retail money to buy in and for people to add Bitcoin exposure to their retirement accounts, which has helped convince some naysayers, he added.
“People that have been skeptical are now open-minded,” Lubka said.
Although Lubka warned that nobody has a crystal ball, he said Bitcoin could reach $300,000 during the next year-and-a-half thanks to Bitcoin ETF inflows. That cash influx has been fueled in part by marketing and promotion on the part of the issuers. Yet, the ETFs have only been trading for about two months, Lubka said, and there is much more that the firms have in store.
“I have it on pretty good authority that the promotion hasn’t even really started yet,” he said. “We’re in the first inning of their marketing efforts. I have this direct from some of the issuers.”
Even if the newcomers are only dedicating a small percentage of their holdings to the cryptocurrency (one Fidelity research note explores a hypothetical allocation of 2%-4% to the asset), that still amounts to billions of dollars of investment—which is already starting to be reflected in the inflows to the most popular Bitcoin ETFs, Lubka said.
On Friday, the largest of the ETFs, BlackRock’s iShares Bitcoin Trust (IBIT), jumped above $10 billion in assets under management after receiving a record $612 million of inflows in a single day. And already, the $7.7 billion in year-to-date Bitcoin inflows have exceeded all inflows from 2021, the year in which the coin reached its record high, according to Bank of America Global Research’s Flow Show team, led by investment strategist Michael Hartnett.
On average, U.S. spot Bitcoin ETFs have brought in $212 million per calendar day in February, Zach Pandl, the managing director of research at Grayscale, which issues one of the spot Bitcoin ETFs, said in a statement.
Also playing into Bitcoin’s recent rise is the impending “halving,” which sometime in April will halve the crypto reward issued to miners for successfully issuing a Bitcoin on the blockchain to reduce the rate at which Bitcoins are introduced into circulation, said William Quigley, the cofounder of stablecoin Tether and the WAX blockchain.
Although Quigley cautioned that data is limited, he added that Bitcoin could rise further based on the past three halvings, which lifted Bitcoin’s price by many multiples.
He added that based on historical trends, Bitcoin’s price usually peaks in the six months following the halving, and then retreats heavily after 18 months, although he said it should settle somewhere above its pre-halving price.
“I’d probably say to people, if you’re going to get involved in Bitcoin, do that prior to November 2024,” he said.
Quigley told Fortune that he believes Bitcoin’s price will continue to increase, although he warned that investors should not get caught up in a herd mentality. He predicts that a bull market could begin in October or November and last about a year, bringing Bitcoin to a peak price of $250,000.
Still, Quigley cautioned that investors could get caught up in the hype and lose money if the sentiment changes around Bitcoin in the future unless they can hold on for the long run.
“I tell everybody who’s thinking about getting into Bitcoin, I would not buy it if I couldn’t hold it for at least five years,” he said.
