Bitcoin price has risen over 60% since the beginning of the year. However, it is almost 30% lower since the April peak. With just a few months to go until the end of the year, forecasts are flying left and right on the asset’s price.
One of the most popular models – the Stock-to-Flow – sees the BTC exploring six-figure territory in late December. For bitcoin to reach such invisible and unimaginable heights (at least until recently), it would have to more than double its value in a few months.
As such, the model’s creator recently described some of the potential reasons that could drive such an impressive increase.
Bitcoin ETF Approval in the US
Perhaps one of the most discussed topics in the cryptocurrency space in the past year or so is whether the US Securities and Exchange Commission will approve an exchange-traded fund tracking bitcoin performance. It became even more popular after Canada and Brazil gave these products the green light in early 2021.
The SEC has received numerous requests since 2016. It rejected nearly all of them until last year, but in 2021 it takes a new approach – delaying decisions. That, Gary Gensler’s tips, and the fact that several analysts claim that a BTC Futures ETF may be just around the corner, have led to speculation that such a product could indeed be approved by the end of this year.
If it does happen, this would legitimize the primary cryptocurrency among many investors and traditional financial institutions, as they would have exposure to the asset through a well-regulated Bitcoin ETF. As such, the implications of such a move could in fact lead to a substantial appreciation in the price of the underlying asset.
Adoption is another crucial word in this (and last) year. PlanB addressed bitcoin legalization in El Salvador, as the country made history in September, when it became the first nation to do so.
So far, the use of BTC is growing rapidly, at least according to El Salvador’s President Nayib Bukele. As such, the creator of S2F pointed out that if another country follows this example, it could increase the price of cryptocurrency.
Even if it’s not a country, a prominent name could do the same. We’ve already seen how the price of BTC can fluctuate when names like Elon Musk talk about it. So in case the crypto community gets a new Michael Saylor, bitcoin could really skyrocket.
Adoption can also come from companies like Apple, Amazon, Google or Microsoft. A recent false report claiming that Walmart will allow Litecoin payments has the BTC up a few thousand dollars in minutes.
Although it turns out to be false (which dropped the price of bitcoin just as quickly), we can only imagine what would happen if one of the largest organizations in the world joined the cryptocurrency movement.
Return from China
This seems like the most unimaginable scenario at the moment. China has been against the cryptocurrency space almost since it’s been around. This year, however, the country has taken it to a whole different level, going after digital asset miners, commerce and everything in between.
Miners had to look for other homes, which had temporary adverse effects on the BTC network. Numerous centralized cryptocurrency exchanges have had to disrupt services to Chinese users.
The world’s most populous nation, known for its dislike of decentralized products or widely accepted Internet entities, is developing its own digital currency at the central bank. It will work in a totally different way than bitcoin, which means it will allow the government to maintain control over all transactions.
Consequently, the chances of a turnaround in China seem slim to none. However, it may not be necessary. The US – the world’s largest country in nominal GDP – has already said it will not follow suit, which has had a positive impact on markets.
what the story says
Bitcoin is under $50,000 as of now. If you reach $100,000 by the end of December, it would mean that your value should increase by more than 100%. It seems like a daunting task, given the fact that it’s less than three months away.
However, history shows that the primary cryptocurrency is capable of such impressive increases. Exactly a year ago it was trading at $10,500. However, it had great growth in late 2020 and ended the year at $29,000. From a percentage point of view, this is a 175% increase over the same period.