Blockstream CEO Adam Back anticipates a potential resurgence for Bitcoin (BTC) in 2024, envisioning a trajectory that could propel the leading cryptocurrency to $100,000.
In a recent interview, the distinguished cryptographer and originator of the proof-of-work algorithm underpinning Bitcoin’s protocol emphasized that the current value of Bitcoin is trailing below the historical price trend observed during previous mining reward halving events. These halvings, occurring every 210,000 blocks, reduce the block reward from 6.25 BTC to 3.125 BTC.
Back posited that, when assessing the historical trends of market cycles and halvings, Bitcoin’s current valuation is lagging behind widely accepted projections. A confluence of factors, both within traditional financial markets and the cryptocurrency space, has contributed to the decline in BTC’s price.
He described the past few years as akin to a series of challenges, including the impact of COVID-19, quantitative easing, and geopolitical conflicts affecting power prices. Inflation, bankruptcies of companies, and overall market uncertainties have led investment managers to navigate risks and losses, often resorting to the sale of more liquid assets like Bitcoin.
Looking ahead to 2024, Back noted that many macro events negatively affecting Bitcoin’s price have either subsided or been resolved. This is evident in Bitcoin’s recent price surge since November 2023.
Back remains steadfast in his prediction that Bitcoin will reach $100,000 in the next market cycle. He attributed the delayed achievement of this milestone to the macroeconomic factors mentioned earlier.
Referencing the Bitcoin “stock-to-flow” model developed by PlanB, Back pointed out the potential upside for Bitcoin in 2024. According to the model, astute Bitcoin investors historically purchased BTC six months before a halving event and sold during significant price surges in the 18 months following the reward reduction.
Despite skepticism when he initially made the prediction with Bitcoin priced around $20,000, Back highlighted that Bitcoin repeatedly hitting $44,000 in December 2023 suggests the feasibility of his earlier projection.
Additionally, the potential approval of several spot Bitcoin exchange-traded fund (ETF) applications by the United States Securities and Exchange Commission (SEC) could have a significant impact. Back, along with other prominent investors and analysts, foresees substantial institutional investment flowing into BTC-backed products, with the ETF potentially playing a pivotal role.
He emphasized that certain segments of traditional markets, including major fund managers like BlackRock and Fidelity, are currently restricted from directly investing in assets like Bitcoin due to regulatory constraints. The approval of Bitcoin ETFs could unlock a new avenue for institutional investment, potentially contributing to Bitcoin’s ascent to $100,000.
