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1 Top Cryptocurrency to Buy Before It Rises 635% to 5,480%, According to Some Wall Street Analysts

Selected Wall Street analysts believe that the Bitcoin price will rise significantly in the coming years.

Risky assets typically perform better when interest rates are low, but speculation that stubborn inflation could prompt the central bank to cut rates more slowly than expected has been a headwind for cryptocurrencies in recent weeks.

In fact, while Bitcoin (BTC 2.57%) In March, the price reached a new record of $73,000, but has since fallen 7 percent to $68,000. However, several Wall Street analysts see significant upside potential for patient investors.

  • Tom Lee, managing partner and head of research at Fundstrat Global Advisors, believes that the combination of recently approved spot Bitcoin ETFs, the recent Bitcoin block subsidy halving, and eventual monetary easing (lower interest rates) could push Bitcoin to $150,000 by 2025 and $500,000 by 2029. That last figure represents 635% upside potential from the current price of $68,000.
  • Anthony Scaramucci, founder and managing partner of SkyBridge Capital, recently told CNBC Spot that Bitcoin ETFs could propel the cryptocurrency beyond the market cap of gold, which currently stands at about $16 trillion. In that scenario, a single Bitcoin would be worth about $800,000, representing an upside potential of about 1,075 percent from the current price.
  • Cathie Wood, CEO and CIO at Ark Invest, believes that spot Bitcoin ETFs will ultimately account for about 5% of institutional assets, which would push the price of a single Bitcoin to $3.8 million. This estimate represents an upside potential of about 5,480% from the current price.

As a caveat, investors should never place too much faith in price targets. They are merely educated guesses about what might happen in the future. Nevertheless, given the enormous upside potential implied by the above price targets, Bitcoin deserves further consideration. Here’s what investors should know:

The investment thesis for Bitcoin is simple

The price of Bitcoin is governed by supply and demand, but since the supply is capped at 21 million coins, demand is the most important variable. This means that Bitcoin’s future price action depends on whether demand increases or decreases from current levels.

Two recent developments could boost demand in the coming months and years. First, the Security and Exchange Commission (SEC) approved spot Bitcoin ETFs in January 2024. Second, the Bitcoin block subsidy was halved in April 2024.

Spot Bitcoin ETFs could bring institutional investors to the market

Spot Bitcoin ETFs provide investors with direct Bitcoin exposure through their brokerage accounts, eliminating the need to open new accounts with cryptocurrency exchanges. Additionally, while Spot Bitcoin ETFs charge annual fees expressed as an expense ratio, these are often lower than the transaction fees charged by cryptocurrency exchanges.

In short, spot Bitcoin ETFs reduce friction for both retail and institutional investors. When I say institutional investors, I mean professional asset managers such as family offices, foundations, hedge funds, insurance companies, and investment banks. According to PwC, assets under management (AUM) by institutional investors are expected to reach $145 trillion by 2025. If even a small portion of that sum were invested in Bitcoin, the price of the cryptocurrency could increase significantly.

As mentioned, Ark Invest believes that spot Bitcoin ETFs will eventually account for just over 5% of institutional assets under management, which is roughly $8 trillion (based on PwC’s estimate). For comparison, we are currently far from that number. Spot Bitcoin ETFs have about $57 billion in assets under management, and most of that money is coming from retail investors.

However, US regulators only approved spot Bitcoin ETFs in January, and the early results are undoubtedly encouraging. iShares Bitcoin Trust (NASDAQ: IBIT) from BlackRock and that Wise Origin Bitcoin Trust (NYSEMKT:FBTC) According to Bloomberg’s Eric Balchunas, Fidelity’s ETFs have accumulated more assets in their first 50 days on the market than any other ETF in history.

In addition, Forms 13F filed for the first quarter of 2024 show that a few hundred institutional investors have acquired small positions in various spot Bitcoin ETFs. These include banks such as JPMorgan Chase, US BankAnd Wells Fargoas well as highly profitable hedge funds such as Citadel, DE Shaw and Millennium Management.

Halving Bitcoin block subsidies should reduce miners’ selling pressure

Bitcoin miners make money through block subsidies and transaction fees, collectively known as block rewards. Block subsidies, which represent newly minted bitcoins, are halved every time 210,000 blocks (groups of transactions) are validated and added to the blockchain, which happens about every four years.

The most recent halving event occurred in April 2024, when the block subsidy fell from 6.25 BTC to 3.125 BTC. This was the fourth halving event since Bitcoin’s launch, and the associated decrease in selling pressure – miners will have less Bitcoin to sell over the next four years – bodes well for investors, as it would equate to an increase in demand.

In fact, the Bitcoin price has increased significantly following previous halving events.

Halving event

Bitcoin return (2 years later)

November 2012

2.964%

July 2016

922%

June 2020

348%

Data source: Fidelity Digital Assets.

Is Bitcoin a good investment?

Investors comfortable with risk and volatility should consider buying a small position in Bitcoin today, provided they have the right mindset. Cryptocurrency prices can rise and fall quickly, sometimes for seemingly nonsensical reasons, so investors should be prepared to hold their Bitcoins through ups and downs for a long period of time.

Furthermore, there is no guarantee that Bitcoin will ever reach the price targets mentioned above. For this reason, Bitcoin is best viewed as one component of a diversified portfolio.

JPMorgan Chase is a promotional partner of The Ascent, a Motley Fool company. Wells Fargo is a promotional partner of The Ascent, a Motley Fool company. Trevor Jennewine does not own any stocks mentioned. The Motley Fool owns and recommends Bitcoin, JPMorgan Chase, and US Bancorp. The Motley Fool has a disclosure policy.

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