Bitcoin Breaks $80,000: What Are the Key Drivers Behind the New All-Time High?
Has the "Crazy Bull Market" Returned, and What Future Worries Remain?
GSR Research Analyst Toe Bautista stated after Trump won the U.S. election that from the perspective of altcoins, many projects have been waiting for the right moment, observing the issuance of other tokens and the election results. He also believes that if macro conditions remain favorable, the price of Bitcoin may continue to rise. "It is easy to foresee Bitcoin rising to $80,000, whether in Q1 of next year or by the end of the month."
After Trump was elected as U.S. President, everyone was expecting BTC to quickly surpass $80,000, but they certainly did not anticipate the arrival of this $80,000 milestone so quickly.
Micro Strategy Holdings
MicroStrategy, as a company holding a large amount of BTC, currently holds a total of 252,220 bitcoins. The total purchase cost is approximately $9.9 billion, the average purchase price is around $39,266, and the current total value of Bitcoin holdings is $20.177 billion.
ETF Inflows
ETFs were highly anticipated at launch mainly due to the influx of new funds, and the Bitcoin price also reached new highs. However, soon after, total ETF funds started to flow out, and market sentiment began to decline. But looking at recent developments, BTC ETFs have continued to experience significant inflows of funds.
Not only has there been a record single-day net inflow of funds, but also a record high in holdings. The logic is also very clear: after Trump took office, a "crypto golden age" is likely to emerge, and the political support for crypto in the U.S. will grow stronger. For traditional financial "whales," the likelihood of allocating funds to crypto has increased. BTC ETF has become the most convenient channel for investing in crypto. For other U.S. stock investors, BTC ETF will also become very attractive under Trump's administration.
Interest Rate Cuts
The Fed cut rates by 50 basis points in September, well exceeding expectations, and Bitcoin also surged in response. The November rate meeting also confirmed a 25 basis point rate cut, which is generally understood by the market as a positive factor, especially since the previous bull market started with the rate cut in March 2020.
November Historical Data
Aside from the data, let's add a bit of ceremony.
According to Coinglass data, after the Bitcoin halvings in 2012, 2016, and 2020, the fourth-quarter investment returns were strong, with percentages of 97.7%, 58.17%, and 168.02%, respectively. The return rate in November 2016 was 5.42%, in November 2020 was 42.95%, and this month's return rate is still promising.
It is worth noting that Bitcoin saw a 7.35% increase in September this year, marking its best historical performance. Historically, whenever Bitcoin has seen a September increase, it has risen until the end of the year.
After darkness, history comes.
Bitcoin's Future Trend: How Do Traders View It?
PlanB: BTC Could Reach $1 Million by End of 2025
PlanB is the creator of the Bitcoin Stock-to-Flow (S2F) model, and he has a high reputation in the crypto industry for his unique model that relates asset scarcity to price. His analysis focuses on the long-term value growth potential of Bitcoin, especially after halving events. His latest prediction suggests that if Trump wins the upcoming presidential election, the Bitcoin market may experience an unprecedented price surge. PlanB has outlined the price development direction of Bitcoin under different market scenarios by constructing a series of monthly timetables.
In a prediction made several months ago, PlanB provided specific values based on his S2F model:
November: Trump wins the election, and Bitcoin's price reaches $100,000. If Trump wins the election, PlanB believes Bitcoin will reach a significant turning point. He pointed out that a Trump presidency may bring a crypto-friendly policy environment, ending the current Biden/Harris administration's "war" on cryptocurrency. Particularly, policy balancing against regulatory officials such as Gary Gensler and Elizabeth Warren would directly drive the Bitcoin price to $100,000.
December: Large ETF inflows lead Bitcoin to surge to $150,000. PlanB believes a Trump victory will clear the path for Bitcoin ETF approval, expecting a large influx of funds into the market. ETF inflows represent mainstream financial market acceptance and investor trust, further propelling the Bitcoin price to $150,000.
January 2025: Crypto industry flows back to the US, and Bitcoin climbs to $200,000. With the Trump administration's open cryptocurrency policies, many crypto industry companies and investors may bring their businesses back to the US. PlanB anticipates this will create a significant market demand effect, driving the Bitcoin price to $200,000.
February 2025: The "Power Law" team takes profits and exits, causing the price to fall to $150,000. The February pullback is seen as a correction in the Bitcoin market. PlanB believes that investors taking profits will lead Bitcoin to briefly retreat to $150,000 after reaching a high. However, this adjustment is expected to be brief and necessary, laying a more stable foundation for the next phase of the rise.
March to May 2025: Bitcoin's globalization trend pushes the price above $500,000. Starting in March, PlanB anticipates countries like Bhutan, Argentina, Dubai, among others, will progressively adopt Bitcoin as legal tender. In April, driven by Trump, the U.S. will also start building up Bitcoin strategic reserves. Then, in May, he believes other countries, especially non-EU nations, will join this wave, further propelling Bitcoin to surpass $500,000.
June 2025: AI boost drives the price to $600,000. In June, PlanB introduces the hypothesis of artificial intelligence autonomously engaging in arbitrage in the Bitcoin market. He expects that with AI's participation in the Bitcoin market, this high-frequency trading will further drive the price up, pushing Bitcoin beyond $600,000.
July to December 2025: FOMO subsides, reaching $1 million. Over the following months, PlanB believes the market's FOMO sentiment will start to fade, and Bitcoin is poised to hit a new high of $1 million by the end of the year. At this point, Bitcoin will not only become a mainstream asset reserve but also a mandatory allocation for global investors.
2026-2027: Market correction and bear market. In 2026, PlanB predicts Bitcoin's price will retrace from $1 million to $500,000, entering a distribution phase, and by 2027, the market will enter a bear market, with Bitcoin's price expected to dip to $200,000.
PlanB concludes that the key to this forecast lies in Bitcoin's scarcity value. He points out that scarcity will be a core driver of asset prices, much like real estate and gold. PlanB believes that over the next 18 months, Bitcoin's price is set to experience exponential growth driven by the halving effect and market demand, further solidifying its "digital gold" status among global investors.
The key to PlanB's forecast lies in Bitcoin's scarcity value. He notes that investors favor scarcity, and currently there are essentially three options for scarcity: real estate (S2F 100, $10 trillion market cap), gold (S2F 60, $20 trillion market cap), or Bitcoin (S2F 120, $1 trillion market cap). Therefore, Bitcoin's scarcity will be a core driver of asset prices, much like real estate and gold's scarcity assets.
PlanB proposed the opposite scenario, stating that if Harris were to win, he believed it would signify the "end of Western civilization" and further accelerate the decline of the American empire. He anticipated that the crypto industry would face increased pressure under the regulation of Gensler and Warren, leading to more suffocating actions, and possibly even facing stricter tax policies such as the introduction of unrealized capital gains taxes. However, he also emphasized that Bitcoin does not rely on a specific regulatory environment, and its value proposition would still stem from global demand for scarcity.
Alex Krüger: BTC Spot to Lead on Election Night
Argentinian economist, trader, and advisor Alex Krüger believed that the election results would directly impact the price of Bitcoin:
Trump Victory: Bitcoin year-end target price of $90,000. Krüger believed that if Trump were to win, the price of Bitcoin would rapidly rise to $90,000 by the end of the year, with a 55% probability of realization. In this scenario, he predicted that the Bitcoin price would "rapidly surge" as the market had already partially priced in the benefits of a Trump victory. However, there still existed a certain degree of price underestimation, and the market's swift response would be reflected shortly after the confirmation of the news.
The Giver: Mid-term Decline Post-Election
The Giver is an anonymous seasoned investor with extensive experience in trading at both buy and sell-side financial institutions. Currently engaged in private equity investments in special situations, he provided a different perspective. The Giver's strategy, compared to Krüger and PlanB, is more conservative and focuses on the short term, viewing the election-driven Bitcoin rally as more of a temporary phenomenon than a long-term trend. This perspective particularly emphasizes market liquidity and the driving effect of short-term events, suggesting that Bitcoin may experience a post-election price correction. His specific analysis included:
The driving force behind this Bitcoin rally is event-driven "non-sticky" buyers, namely some short-term speculators seeking to hedge election risks, rather than due to an overall trend. These buyers will not hold Bitcoin for the long term, and once the election dust settles, they may swiftly exit the market. Hence, these funds lack "stickiness," and Bitcoin's price may face selling pressure post-election.
Altcoins' lackluster performance compared to Bitcoin is attributed to Bitcoin's concentration. In his view, the influx of funds is mainly concentrated in Bitcoin and has not widely spread to altcoins, resulting in the poor performance of altcoins. This indicates that the current fund flows are more based on Bitcoin as a hedge tool rather than a market-wide positive.
The Giver expected that in the upcoming week, Bitcoin's open interest and position would continue to be crowded, possibly reaching new highs. He noted that this "right-tail effect" could lead to a short-term surge in Bitcoin's price; however, limited by the market capacity in Q4 of 2024, it is unlikely to continue into the next year. This short-term effect increases the likelihood of Bitcoin's price peaking before the election, but the speculative liquidity behind it is insufficient to sustain a long-term uptrend.
Based on this assessment, The Giver proposed a relatively aggressive investment strategy: considering the current market environment, he suggested longing Bitcoin and shorting other mainstream and meme coins. Bitcoin is expected to test $70,000 before the election day, but regardless of the election outcome, a mid-term correction is expected post-results. For more information, read "Analyzing BTC Price Performance in 2024: From the Trump Effect, Microstrategy Premium, to Liquidity Cycle".
Markus: Long BTC and Short SOL Hedge Strategy
Markus Thielen is a renowned analyst at Matrixport and 10X Research, known for his highly accurate prediction of Bitcoin reaching a $1 trillion market cap months ago, which quickly circulated within the investment community, gaining widespread recognition.
Markus's latest analysis is based on 10X Research's updated signal model, which has an accuracy rate of 73% to 87%, typically realized within 2 weeks to 9 months. He predicts that if Bitcoin's price continues along its historical trend, it could see an 8% increase in the next two weeks, 13% in a month, 26% in two months, and 40% in three months. By this calculation, the price of Bitcoin could potentially surpass $100,000 by January 27, 2025, and reach a target of around $140,000 by April 29, 2025.
Regarding the election results, Markus analyzed the potential impact of different election outcomes on Bitcoin and other crypto assets. Markus predicts that if Trump is re-elected, Bitcoin may rise by 5%, and Solana and Ethereum could also see similar increases. He believes that Trump's victory would bring about a more crypto-friendly policy environment, likely driving the market upwards.
In this scenario, Markus proposes a strategy of "longing Bitcoin and shorting Solana" to hedge against the uncertainty of the election outcome. However, Markus also notes that if the election results are delayed or disputed, it would increase market uncertainty, potentially leading to higher Bitcoin volatility.
In the event of a disputed election result or if Harris's victory causes a short-term Bitcoin dip, Markus emphasizes that Bitcoin may still demonstrate strong resilience to downward pressure. Therefore, he advises investors to seize the buying opportunity after a short-term Bitcoin dip.
From the derivative market and on-chain data perspective, the total amount of Bitcoin held by short-term holders saw an increase in October, while the amount held by long-term holders decreased, a dynamic that typically occurs around key price breakout levels. The total open interest of Bitcoin options has surged to $22.5 billion within 2024, showcasing the market's high sentiment towards a Bitcoin bull run. Bitcoin's 25 Delta skew is at the lower end of the annual range (-8% to -10%), indicating strong bullish sentiment.
Thielen also pays particular attention to the impact of MicroStrategy's stock performance on Bitcoin's price. He points out that since October, MicroStrategy's stock price has risen by 33%, and its stock surge has had a "dog tail effect" on the Bitcoin price. The closure of a significant amount of short positions has further boosted the market's bullish sentiment towards Bitcoin.
Standard Chartered Analyst: Trump Victory Could Propel BTC to $125,000 by Year-End
According to an October 25th report by Cointelegraph, Standard Chartered Bank analyst Geoff Kendrick predicts that if Trump wins the November election, Bitcoin's price could climb to $125,000 by the end of the year.
Kendrick's model indicates that on election day (November 5th), Bitcoin may stabilize around $73,000. In the event of a Trump victory, Kendrick expects Bitcoin to immediately rise by about 4%, followed by a further 10% increase in the following days, driven mainly by rising market confidence and a relaxed regulatory environment.
Meanwhile, another brokerage firm Bernstein's research report suggests that if Trump wins the November election, Bitcoin is expected to reach a new high later this year, with Bitcoin's price potentially reaching $90,000 in the fourth quarter. In contrast, if Harris wins, the market may anticipate increased regulations, leading Bitcoin's price to oscillate in the range of $30,000 to $40,000.
What we can foresee at the moment is that BTC has already broken ATH, and there is no technical "resistance level" for future price increases. BTC has not disappointed any spot holders.
However, with about two months left until Trump officially takes office, will a new narrative emerge during this "narrative vacuum" period, leading to further price increases, and will Trump fulfill his previous promises after taking office? Let's wait and see.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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