Bitcoin will hit 100k after the halving

According to the CEO of investment firm Morgan Creek, Mark W. Yusko, Bitcoin will touch $100,000 after the new halving expected in 2024.

Summary

• Bitcoin to $100,000 after the fourth halving
• Fair value of Bitcoin according to Morgan Creek
• The relationship between the halving and the price of Bitcoin

Bitcoin to $100,000 after the fourth halving

Predictions about Bitcoin’s future performance have always been a popular exercise among both industry experts and ordinary investors. But as is often the case in such cases, the predictions have rarely turned out to be right, whether in terms of time frame or intensity Certainly, cryptocurrencies have shown enough volatility that being able to make predictions becomes an increasingly difficult task. 

However, some of the predictions heard in the past few months that Bitcoin would reach $1 million in value within a few years, such as that of former Bitmex CEO Arthur Hayes, certainly seemed like true hype. 

The CEO of Morgan Creek, a company specializing in investments and asset management, is also accustomed to making predictions about Bitcoin, which have almost always turned out to be far-fetched. Like the one he made in December 2019, when he predicted Bitcoin reaching $100,000 (in reality, it’s not like he went too far, considering that in November it touched $70,000) by 2021 and 500,000 within ten years. Or like the one from last year when he said he was certain of Bitcoin reaching $250,000 by 2025.

The founder of the same fund, Anthony Pompliano, after years of supporting the cryptocurrency and issuing huge predictions about its future prices, said that BTC showed him that “price predictions are a fool’s game.” But evidently the CEO of his former company, does not seem to be of the same opinion, considering that just in the past few days he has made a fresh prediction, namely that the price of Bitcoin may reach $100,000, by the next halving, which is expected in 2024.

At a recent event, Yusko, who has always been one of the most optimistic about Bitcoin’s future prices, pointed out that, in his opinion, the next bull run will precisely take place no earlier than 2024, coinciding with the next halving, which is the reduction of rewards expected for Bitcoin miners for their block validation work. This event is repeated every four years, as envisioned by Bitcoin founder Satoshi Nakamoto. 

Initially in 2009, 50 BTC were distributed as a reward for each block mined. A reward that subsequently halved every four years. Currently, the reward for each block mined (one every 10 minutes or so) is 6.25. in 2024 it will be 3.125, and so on until the last of the intended 21 million Bitcoin is mined.

Fair value of Bitcoin according to Morgan Creek

At the same time, the CEO of Morgan Creek has also argued that the current price is well below its fair value, which should be around $30,000. According to Yusko, the so-called cryptocurrency winter may have reached its conclusion and a new phase may begin. 

 Yusko said:

“So I will argue that spring has sprung. If you look at the last two cycles, we are the same number of days into that cycle where spring began, and winter ended. Spring could last months. We don’t have to have an immediate bull market.”

The fact that Yusko predicts the next bull run to coincide precisely with the new halving is by no means coincidental, considering that many analysts and experts coincide precisely with the halving of expected rewards every four years, with an upward movement in prices. The run-up in Bitcoin and the entire market usually happens about a year after the halving.  

Such was the case in 2013, after the first halving in 2012, with BTC rising from $13 to over $1100. Which was punctually repeated in 2017 with Bitcoin’s first real and mighty bull run that took prices above $20,000 for the first time, only to collapse in a few months to just over $2,000. And the same thing happened in 2021, after the third halving in 2020, with Bitcoin’s insane run to nearly touch $70,000.

The relationship between the halving and the price of Bitcoin

The rise in prices is made to coincide with the fact that the halving dramatically reduces Bitcoin’s inflation, just as was predicted by its founder, who among the main purposes of his digital currency, had also included that of being a hedge instrument against inflation, on par with and more than safe-haven assets, such as gold, for example. 

In other words, the halving of Bitcoin has as its effect and goal to decrease the amount of new Bitcoin generated per block. This means that the supply of new Bitcoin inevitably becomes lower, despite the fact that demand remains virtually unchanged, thus theoretically generating a lower supply, relative to demand.

In normal markets, a lower supply with stable demand usually leads to higher prices. And that is why especially after a certain period after the halving, strong rises in Bitcoin are expected.

There is a well-known crypto influencer, who goes by the name Plan B, who has now become almost a mythological figure precisely because of his many spot-on predictions about Bitcoin, who has created a prediction model of the prices based on this particular aspect. This model relates the amount of new Bitcoin issued (A) to the amount already in existence (B). What is generated is the scarcity rate given by B/A. In the case of Bitcoin, each time there is a halving, component A decreases, increasing the scarcity rate. Theory dictates that as the scarcity rate increases, the price adjusts very quickly to continue to meet demand.

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