Bitcoin, the leading cryptocurrency, has been a subject of speculation and analysis for years. According to Matthew Sigel, Head of Digital Assets Research at VanEck, Bitcoin could potentially skyrocket to $180,000 by 2025, provided certain cycle indicators remain muted. In a detailed conversation with podcast host Natalie Brunell, Sigel highlighted a consistent four-year pattern in Bitcoin’s price movements that appear to have endured through several market cycles.
Why $180,000 Per Bitcoin Seems Plausible
Sigel elaborated on the cyclical nature of Bitcoin, noting that it tends to outperform most asset classes for three years within each four-year halving cycle, followed by a significant correction in the fourth year. Historically, this correction ranges from 60% to 80%, typically occurring about two years post-halving. With Bitcoin’s latest halving event in April 2024, Sigel predicts that both 2024 and 2025 could be robust years for the cryptocurrency.
Analyzing Historical Data
Drawing parallels from historical data, Sigel noted the smallest appreciation from trough to peak in Bitcoin’s previous cycles was roughly 2,000%. Even if this figure were to halve to 1,000%, Bitcoin could ascend from a low of approximately $18,000 to as high as $180,000 within the current cycle. He emphasized that while Bitcoin’s volatile nature might lead to price overshooting or undershooting, $180,000 remains a plausible target for 2024, assuming no significant “red light” indicators emerge.
Key Topping Signals
Sigel identified crucial topping signals for traders to monitor. The first is derivatives funding rates; a prolonged annualized cost exceeding 10% for bullish Bitcoin positions on leveraged markets is considered a warning sign. Sigel observed that recent market activities have reset these elevated funding rates, reducing immediate concerns.
The second signal involves analyzing the level of unrealized profits on the blockchain, which can indicate potential selling pressure if market participants’ cost basis is low. Currently, Sigel noted that there are no alarming levels of unrealized profits. Additionally, anecdotal evidence of widespread retail leverage or speculation could also serve as a cautionary indicator. Sigel suggested that if all these risk signals align at a specific price point, such as $150,000, traders should be cautious. However, if Bitcoin reaches $180,000 without these warnings, there might be room for further growth.
Next BTC Cycle Predictions
Looking beyond 2025, Sigel explored the long-term growth potential of Bitcoin by comparing it to gold’s market capitalization. Considering that about half of gold’s supply is used for industrial and jewelry purposes, he reasoned that Bitcoin’s function as an investment and store of value could be directly compared to the remaining half of gold’s market. If Bitcoin were to achieve a valuation similar to this portion of gold’s market cap, Sigel projects a potential trend towards approximately $450,000 per coin in the next cycle.
Long-term Vision and Global Dynamics
Sigel also delved into a more forward-looking model developed by VanEck, which envisions global central banks incorporating Bitcoin into their reserves, even at a minimal 2% weighting. Currently, gold constitutes about 18% of central bank reserves worldwide, and Sigel suggested that Bitcoin’s share would likely be much smaller. He further considered the possibility of Bitcoin serving as a settlement currency for international trade, especially within emerging economic alliances like the BRICS nations (Brazil, Russia, India, China, and South Africa). In VanEck’s calculations, such a scenario could propel Bitcoin’s value to $3 million per coin by 2050, representing a compound annual growth rate of about 16%.
As of now, Bitcoin is trading at $107,219, sparking significant interest and discussion about its future trajectory.
