Bitcoin will reach 100k after the halving

According to the CEO of investment firm Morgan Creek, Mark W. Yusko, Bitcoin will touch $100,000 after the new halving expected in 2024.

Bitcoin to $100,000 after the fourth halving

Predicting Bitcoin’s future performance has always been a popular exercise among industry experts and ordinary investors alike. But, as is often the case in such cases, the predictions have rarely proved correct, whether in terms of time frame or intensity. Certainly, cryptocurrencies have shown enough volatility that being able to make predictions is an increasingly difficult task.

However, some of the predictions heard in recent months that Bitcoin would reach 1 million dollars in value within a few years, such as former Bitmex CEO. Arthur Hayescertainly seemed like real hype.

The CEO of Morgan Creek, a company specializing in investments and asset management, is also used to making predictions about Bitcoin, which have almost always turned out to be far-fetched. Like the one he made in December 2019, when he predicted that Bitcoin would reach $100,000 (in reality, it’s not like he went too far, considering that in November it touched $70,000) by 2021 and 500,000 within ten years. Or like the one from last year when he said he was sure Bitcoin would reach $250,000 by 2025.

The founder of the same fund, Anthony Pompliano, after years of supporting the cryptocurrency and issuing huge predictions about future prices, said BTC showed him that “price predictions are a fool’s game.” But apparently the CEO of his former company doesn’t seem to be of the same opinion, considering that just in the last few days he has made a new prediction, namely that the price of Bitcoin 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 will precisely occur in 2024 at the earliest, coinciding with the next halving, which is the reduction of rewards expected for Bitcoin miners for their block validation work. This event repeats itself every four years, as Bitcoin founder Satoshi Nakamoto had envisioned.

Originally in 2009, 50 BTC was distributed as a reward for each mined block. A reward which was then halved every four years. Currently the reward for each block mined (one every 10 minutes or so) is 6.25. in 2024 it will be 3,125, and so on until the last of the intended 21 million Bitcoins have been mined.

Fair value of Bitcoin according to Morgan Creek

At the same time, the CEO of Morgan Creek has also claimed that the current price is well below the fair value, which should be around $30,000. According to Yusko, the so-called cryptocurrency winter may have reached its conclusion and a new phase may begin.

Yusko said:

“So I would argue that spring has arrived. If you look at the last two cycles, we are the same number of days into that cycle where spring began and winter ended. Spring can last months. We don’t need to have an immediate bull market.”

The fact that Yusko predicts that the next bull run will coincide exactly with the new halving is by no means coincidental, considering that many analysts and experts coincide exactly with the halving of expected rewards every four years, with an upward movement in prices. The rise in Bitcoin and the entire market usually happens about a year after the halving.

Such was the case in 2013, after the first halving in 2012, with BTC rising from $13 to over $1,100. Something that was punctually repeated in 2017 with Bitcoin’s first real and powerful bull run that took prices above $20,000 for the first time, only to collapse within a few months to just over $2,000. And the same thing happened in 2021, after the third halving in 2020, with Bitcoin’s mad run to almost $70,000.

The relationship between the halving and the price of Bitcoin

The price increase is designed to coincide with the fact that the halving dramatically reduces Bitcoin’s inflation, just as predicted by the founder, who among the main purposes of his digital currency had also included being a hedge against inflation, on par with and more than safe assets, such as gold, for example.

In other words, the halving of Bitcoin has the effect and goal of reducing the amount of new Bitcoin generated per block. This means that the supply of new Bitcoin will inevitably be lower, despite demand remaining virtually unchanged, thus theoretically generating a lower supply, relative to demand.

In normal markets, a lower supply with stable demand usually leads to higher prices. And it is therefore especially after a certain period after the halving that strong increases in Bitcoin are expected.

There is a well-known crypto-influenza, which goes by the name Plan B, who has now become almost a mythological figure precisely because of his many spot-on predictions about Bitcoin, which has created a price prediction model based on this very aspect. This model relates the amount of new Bitcoin issued (A) to the amount already in existence (B). What is generated is the scarcity rate given by B/A. In the case of Bitcoin, every time there is a halving, component A decreases, increasing the scarcity rate. The theory dictates that when the scarcity rate increases, the price adjusts very quickly to continue to meet demand.