📰 Table Of Contents
Bitcoin Price Forecast
Tom Lee, a Fundstrat analyst, has predicted that Bitcoin’s price could reach $150,000 by the end of the year, which would be a 3X increase from its current value.
Factors Driving the Forecast
Lee’s bullish prediction is based on two key factors: rising demand due to Bitcoin ETFs and falling supply due to the upcoming Bitcoin halving. He believes that the improving demand with the ETF and the shrinking supply with the halving, combined with expected easing of monetary policy, will be supportive of risk assets.
Bitcoin’s Correlation with Risk Assets
Bitcoin has historically shown correlation with “risk assets” such as tech stocks. It has risen in value as interest rates fall and fallen in value as interest rates rise. Traders are currently pricing in a 53% likelihood that the Federal Reserve will begin cutting interest rates by June, which could further impact Bitcoin’s value.
Impact of Bitcoin Halving
The upcoming Bitcoin halving, a once in four-year event that cuts the rate at which new coins enter circulation in half, is expected to reduce Bitcoin’s daily issuance by 450 BTC, which is worth $23 million at today’s price. This event is expected to further reduce the supply of Bitcoin.
Role of Bitcoin ETFs
Many analysts believe that the newly approved Bitcoin spot ETFs will be the primary catalyst for Bitcoin’s next bull run. Funds launched by major financial institutions have collectively absorbed over $5 billion since their launch on January 11.
Impact on Bitcoin’s Price
These inflows have propelled Bitcoin’s price above $50,000 for the first time in two years, surpassing earlier expectations of a prolonged “sell the news” event after ETF approvals. Lee emphasized the resilience of Bitcoin as a sound and secure asset.
Lee’s Previous Prediction
Lee had previously predicted that BTC could hit $180,000 by the day of the Bitcoin halving, based on estimated daily demand for Bitcoin ETFs reaching $125 million per day. As of February 21, the ETFs have averaged $185 million of daily demand.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
