Could Bitcoin reach $100,000 in 2025?
After Bitcoin (BTC 0.02%) reached an all-time high of nearly $70,000 in November 2023, many thought the original cryptocurrency had enough momentum to hit the six-figure mark of $100,000. However, Bitcoin has fallen as fast as it has risen, and has continued to fall.
Since hitting an all-time high in 2023, bitcoin is down more than 70%. Declines of this magnitude are not uncommon when bear markets and crypto winters arrive, but past data shows that when these price drops end, surges can return as quickly as they left.
In the history of Bitcoin, there have only been three years that have not produced a return of at least 48%. For bitcoin to reach $100,000 in 2025, it would have to gain 490%. This may sound impossible, but Bitcoin has achieved annual returns of over 490% twice in its history.
However, call me a skeptic, but I'm not sure it can hit that mark soon. To get a better idea of what Bitcoin might have in store for 2025, and if or when it hits the $100,000 mark, we need to look at some of the patterns around the Bitcoin halving events.
Every four years, or 210,000 blocks added to the blockchain, Bitcoin undergoes an event referred to as the halving. When halvings arrive, they halve the reward received by bitcoin miners, reducing the rate at which new bitcoins enter circulation. So far, there have been three halvings - November 2012, July 2016, and May 2020. Originally the miner reward was 50 bitcoins, but has since dwindled to just 6.25 bitcoins, and will drop to 3.125 sometime in May 2024.
Surprisingly, when we plot past halving dates on a Bitcoin price chart, a few things become clear. First, let me be clear that these are averages and in no way reasons for trying to time the market.
Based on data from the last three halvings, the bitcoin price typically bottoms out, on average, when the next halving is roughly 1 1/2 years old. With the next halving approaching about 18 months later, the data suggests we may have found a bottom.
In the past, Bitcoin has put up modest returns gradually bottoming out into the next halving. On average, Bitcoin reaches 60% of its previous all-time high when the next halving arrives. That would put the Bitcoin price in May 2024 at around $40,000. Still not a bad comeback, but it does mean that there is no chance of Bitcoin hitting $100,000 in 2025 .
When will Bitcoin reach $100,000?
I think if bitcoin gets to the $100,000 level, it won't happen until sometime in 2025. The same data we evaluated shows that a new all-time high is usually reached a year and a half after the halving. . Now there is no clear pattern as to how far Bitcoin will rise after the halving, but I would bet it could rally 30% above its previous all-time high of around $70k, breaking six figures.
So for bullish investors hoping to get back into the euphoria of 2021, if previous trends hold, you will likely need to wait until 2025 before a new all-time high is touched. But that shouldn't be seen as bad news. Instead, it should be seen as an opportunity. With prices down more than 70%, and the risk of further losses appearing to be minimal, now could be a great time to get exposure to bitcoin in preparation for a longer-term rally. Remember, Bitcoin rewards the patient and the consistent investor.
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