- Michael Cahill, CEO of Douro Labs, said in an interview with The Block: "It's not a question of whether Bit will reach $100,000, but a matter of time."
- Industry experts have different views on when this psychological barrier will be broken, but generally believe it will happen within the next 1 to 3 months.
Since Donald Trump's victory in the US presidential election on November 5, 2024, the price of Bit has been hitting new highs every week. According to The Block's price data, on election night, Bit broke through the previous record high of $73,730 and was around $87,000 at the time of writing.
The positive impact of Trump's election, the expectation that sovereign states may participate in the US Bit strategic reserve, and the easing of interest rates - will these factors sustain the post-election rally for long?
"Don't fight this trend," Bernstein analysts told clients in a Monday report. "Welcome to the crypto bull market - buy everything you can."
Bernstein and Standard Chartered Bank predict that Bit's price could reach $200,000 by the end of next year, but when will the world's largest cryptocurrency break through the $100,000 mark? Today, the total trading volume of Polymarket's bet on whether Bit will break $100,000 by the end of 2024 has exceeded $3 million, and the market estimates the probability of this event occurring at 59%.
Michael Cahill, CEO of Douro Labs, said in an interview with The Block: "It's not a question of whether Bit will reach $100,000, but a matter of time. In my view, this could be achieved as early as the first quarter of 2025. The current macroeconomic environment is favorable for digital assets, and we are witnessing unprecedented momentum."
Matt Klein, investment strategist at Nascent, said: "It will reach $100,000 at the latest before the presidential inauguration. The only question is whether the Lummis bill will be seriously considered. If that bill becomes law, there will be no ceiling."
Fear or no fear?
According to Cahill, the post-election rally is not just driven by FOMO (fear of missing out), as he believes the current prices are no longer just speculative behavior driven by retail investors as in 2017.
"The market is finally starting to view Bit as a legitimate asset and a hedge against inflationary pressures," he said. "Today, we are seeing a structural shift in investors' perception of Bit. The foundation for six-figure prices is being laid, and this rally is expected to consolidate Bit's position as a cornerstone of the global financial system."
Matt Hougan, Chief Investment Officer of Bitwise, said that since Bit broke through $74,000, there is almost no resistance to $100,000, and he believes Bit can "easily" reach that level by the end of the year.
"Everyone is focused on the new buyers of Bit. That's certainly there," Hougan wrote in a post on X. "But the other part of this rally is that people have stopped selling. Long-term holders are no longer willing to sell Bit for less than $100,000, and shorts don't want to stand in front of a speeding train."
Chandra Duggirala, CEO of Tides.Network, said Bit's price could easily reach $100,000 before Thanksgiving, but there are also short-term risks.
"We have not seen strong FOMO from wealth managers, and retail investors have just started paying attention. So the trend is still in the early stages. We believe that once it breaks $100,000, the real FOMO will come," Duggirala wrote in an email.
Zaheer Ebtikar, founder and CIO of Split Capital, expressed a similar view.
"Historically, there has been this notion or belief that Bit's real rally only begins after it sets a new all-time high, so this phenomenon has a certain self-fulfilling effect," Ebtikar told The Block. "But more importantly... a lot of smart money and crypto veterans have already jumped in, and more capital is expected to flow into this space in the future."
He pointed out that if people want to entrust their money to asset allocators, the process will not happen overnight. Therefore, the real FOMO may not appear until December 1, or more likely January 1, 2025.
"I think we have a unique window where a lot of 'smart money' is getting in ahead of the systematic large-scale entry," Ebtikar said.
Views of smart money
Alexander Blume, CEO of Two Prime, said it is "without a doubt" that Bit will reach $100,000 by the end of the year.
"Bit's implied volatility is 55," Blume said. "Although somewhat high, I expect volatility to rise further before the market peaks. In addition, the lending market has just reappeared, indicating there is still room for upside."
According to data from CF Benchmarks, traders seem to be aggressively buying Bit call options with a strike price of $100,000. The 25 Delta skew of the 30-day constant maturity has broken the 5 volatility threshold, which is close to the year's high, indicating a significant increase in demand for upside exposure.
"Furthermore, the implied volatility of out-of-the-money call options (such as the current 5-day options with a strike price above $100,000) is noticeably higher, indicating that traders are preparing for a further breakthrough into six-figure territory," said Thomas Erdösi, product manager at CF Benchmarks.
Wintermute's data shows that the open interest on December 27 indicates a large call demand at the $100,000 strike, with a notional amount reaching $85 billion. By the end of the first quarter of next year, the demand is concentrated between $100,000 and $120,000 for the March 28 contracts. Over the past week, the ETH-BTC spot ratio has risen 11%, the third largest increase this year.
"In 2024, we have consistently pointed out that this spread will be narrowed on every opportunity. The current mainstream view is 'this time is different' - a dangerous stance, as the market has retreated from the Friday highs," said Jake Ostrovskis, an OTC trader at Wintermute.
Geoffrey Kendrick, an analyst at Standard Chartered Bank, said breaking $90,000 would be "easy", possibly before November 29, and reaching $100,000 by December 27, with the potential to reach $125,000 by the end of the year. He emphasized that December 10 is an important observation date, as Microsoft's board will vote on whether to invest in Bit.
"...After the 2016 election, many Trump-related trades peaked around the inauguration on January 20," Kendrick wrote in a November 10 email to clients. "So if Bit doesn't reach $125,000 by December 31, I think it will do so before January 20."
Matt Klein, portfolio strategy analyst at Nascent, said Bit will reach the target at the latest before the presidential inauguration.
"The only question is whether the Lummis bill will be seriously considered," Klein said. "If that bill becomes law, there will be no ceiling for Bit."
Earlier this year, Senator Cynthia Lummis proposed a bill requiring the US Treasury to purchase 1 million Bit over five years to address the impact of dollar depreciation. She also introduced a stablecoin bill in April.
With the electoral defeat of senators like Sherrod Brown, the most crypto-friendly Congress in US history has been assembled, which will garner more support for the crypto industry across government agencies. Combined with Trump's economic policies potentially weakening the dollar, Arthur Hayes is bullish on Bit soaring even higher.
"As the free-floating supply of Bit decreases, the largest fiat currency in history will chase the safe-haven asset, not just Americans, but Chinese, Japanese, and Western Europeans," Hayes said. "This is how Bit reaches $1 million, because prices are determined at the margin. Hold long-term and stay the course."
