SCB - not to be confused with SVB - has come out and said (via an analyst) that they believe Bitcoin will hit $100,000 by the end of 2024. Backing this prediction are 3 main points and today, I'll unpack those points.
- Banking Crisis
- Stabilization of Risk Assets
- Fed Easing Rates
1). Banking Crisis
A lot of investors have shifted their portfolios quite significantly in the post-SVB world. We saw a few banks go under including SVB which at the time was the 16th largest bank in the US.
This caused a massive panic and everyone decided to take a closer look at banks and how they operate. Since then, there has also been a lot of pressure on the FED to ease their tightening policies.
It turns out that whipsawing the markets from negative interest rates to 5%+ in a matter of months can cause catastrophic outcomes.
The FED knows this. They intentionally were forcing a recession to battle inflation. They may not use so many words to describe what they do, but we all know that is their intention. They went from "inflation is transitory" to "inflation is a national crisis" and used this as justification to whipsaw the markets and tank asset valuations by trillions of dollars globally.
All of this uncertainty led to bank failures and people dumping assets. We've seen hedge funds and banks alike go under because of this uncertainty. The financial game is tough but it is made tougher by uncertain policies.
The one thing that is certain? Bitcoin's financial policies. There are 21M Bitcoins. There will never be more. The schedule with which they are released is predictable and coded. The next halvening is also scheduled to take place on April 15th, 2024. Almost exactly 1 year from today.
2). Stabilization of Risk Assets
Risky assets are starting to stabilize and rise once again. We saw a massive dip in the growth sector of the stock market which coincided with a massive dip in crypto and many other risky assets.
Really, all assets across the board tanked - but as you went out on the risk curve, things got uglier and uglier.
This is one of the many reasons why Bitcoin and Crypto dipped so hard. They are seen as some of the most risky assets in the world.
This makes them have incredible upside but it also makes them the most impacted sector when things start to go south.
We've seen the dip start to mean-revert and we could be in the beginning stages of a "bull market". In my opinion, we still have some digging to do to get us out of the hole that we're in.
Bitcoin is sitting at $27k as I write this. It dipped all the way down to $15k from an ATH of about $60k. This is actually quite solid. If you had dollar-cost averaged (as I always say is my favorite thing to do in this industry), then you'd be sitting on a nice - and profitable - stack of Bitcoins.
3). Fed Easing Rates
This is the point that we are all waiting to see. In fact, the moment that even an inkling of the FED reversing rate hikes will send BTC to the moon. We all know this.
All assets are waiting for this. When - not If - the FED reverses their rate hikes, all assets are going to go parabolic. Bitcoin will lead the pack.
We're seeing banks go under. We're seeing hedge funds struggle. We're seeing businesses shut down.
The only way out of this crisis is the same way out that the FED has deployed many times in the past. Look at 2008 as a great example.
Print money.
I'll keep my cash in assets like Bitcoin and wait for this to happen. I think Bitcoin at $100k by the end of this year is not entirely unlikely (although SCB is calling for BTC at $100k by the end of 2024). I think the end of 2023 is entirely possible although I'm not in the game of predicting timelines.
One thing I know for certain is that BTC is not going anywhere. It's being viewed exactly as the intended purpose of its creation: as a hedge against uncertain financial policies from big governments like the US.
Bitcoin will undoubtedly reach $100k and even higher. Everyone wants to know wen. I know that it is just a matter of time and so, I continue to stack my sats. Do you?
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