Can Bitcoin Break Through $70,000? Institutions Are Bullish, but a "Price War" Is Brewing

Can Bitcoin Break Through $70,000? Institutions Are Bullish, but a "Price War" Is BrewingThe last quarter of 2024 saw vastly different trends across gold, the US dollar, oil, and Bitcoin. While gold soared to new highs and the dollar remained strong amidst an interest rate cut cycle, Brent and NYMEX oil prices hovered around the $70 mark

Can Bitcoin Break Through $70,000? Institutions Are Bullish, but a "Price War" Is Brewing

The last quarter of 2024 saw vastly different trends across gold, the US dollar, oil, and Bitcoin. While gold soared to new highs and the dollar remained strong amidst an interest rate cut cycle, Brent and NYMEX oil prices hovered around the $70 mark. Bitcoin, however, lingered below $70,000, failing to surpass its previous high. Nevertheless, overseas institutions seem bullish on Bitcoin, predicting its price to break into six figures.

On October 24th, Bernstein Research, a US investment firm, released a forecast report predicting Bitcoin to hit $200,000 by the end of 2025. This bold prediction sparked market attention, prompting comparisons with other institutional forecasts. While investment giants like JPMorgan Chase and Standard Chartered previously raised their price targets for Bitcoin to the $100,000 range, Bernstein's prediction is even more "ambitious."

The last time overseas asset management giants led by Morgan Stanley issued forecasts for Bitcoin prices was in 2020, when Bitcoin was trading around $20,000. Following that, Bitcoin experienced a surge in 2021, reaching a peak of $68,000. However, it still fell significantly short of their initial $100,000 prediction. Now they are reaffirming this price. It remains to be seen if the overseas market will follow suit, said LEO, founder of a Hong Kong-based digital asset platform, in an interview with the China Business Times.

Industry analysts believe that the delay in Bitcoin's price exceeding $70,000 is not only attributed to the macro-economic environment but also to Bitcoins inherent characteristics.

From 2022 until now, the US dollar, gold, and Bitcoin have shown a synchronous upward trend. Traditionally, a strong dollar would cause gold and Bitcoin prices to fall. However, over the past three years, despite the dollar's sustained strength due to interest rate hikes, gold has seen a larger increase than the dollar. Bitcoin has also not experienced a price decline due to the strong dollar. It has simply entered a wide trading range. What kind of capital has flowed back into these two assets - gold and Bitcoin? We believe that gold is driven by a need for safe haven and inflation hedge, but the reasons for Bitcoin are more complex. This includes capital inflows from overseas, such as funds withdrawn from emerging markets in US dollars and euros, a portion of which has flowed into the crypto space. The introduction of Bitcoin spot ETFs in the US and other countries last year has also stabilized Bitcoin prices within a large range," said Ding Li (pseudonym), a researcher at a Singaporean digital asset institution, in an interview on October 26th.

Comparing the trendlines of gold and Bitcoin prices, Ding Li believes that they exhibit distinct characteristics.

Taking the COMEX gold price chart as an example, from November 2022 to the present, COMEX gold prices have risen from $1,800 to $2,700, representing a 50% increase. Over the same period, Bitcoin prices have also risen from $20,000 to $74,000, a threefold increase compared to gold. However, Bitcoin achieved this drastic increase after falling from $68,000 in 2021 to below $20,000 in a year. It's a strong rebound, not the same 'long bull' trend as international gold prices," Ding Li pointed out.

He believes that gold, as a conservative asset, exhibits a remarkably stable trend, while virtual digital assets, as high-risk emerging assets, are prone to drastic price fluctuations. Moreover, they are heavily influenced by government policies in various countries. Therefore, while predictions from global giants can serve as a reference point, they should not be treated as the sole path to high asset returns for overseas investors.

Bernstein's report analyzes that by year-end, Wall Street is expected to replace Satoshi Nakamoto as the top Bitcoin wallet. This is attributed to the success of Bitcoin ETFs, which have become a dominant force in ETF trading this year. Data shows that as of October 24th, the total net asset value of Bitcoin spot ETFs stood at $64.088 billion, accounting for 4.86% of Bitcoin's total market cap. The historical cumulative net inflow has reached $21.345 billion.

Simultaneously, JPMorgan Chase also issued a report in mid-October stating that investors are turning to gold and Bitcoin as safe-haven trades amidst escalating geopolitical tensions, to mitigate against potentially disastrous scenarios. Since the beginning of the month, Bitcoin prices have climbed 6%, currently stabilizing above $67,000. On October 21st, Bitcoin briefly touched $69,400, approaching the market's critical psychological level of $70,000.

With the US election concluding in less than two weeks, overseas institutions believe the outcome will likely affect Bitcoin's trajectory.

"I believe that regardless of who wins the US election, positive driving factors will dominate. Bitcoin will surge towards the end of the year, potentially setting a new all-time high. However, given the crypto attitudes currently displayed by both Trump and Harris, the outcome of their competition will still influence Bitcoin's upper limit. If Trump wins, Bitcoin's price will reach ... "