WHEN WILL THE BITCOIN PRICE REACH $ 150K?
Pantera Capital has published a document called "Blockchain Letter," in which they conduct an in-depth analysis of the influence that previous Bitcoin halving occurrences have had on the price of Bitcoin. According to the company, "Bitcoin experienced the longest period of negative year-over-year returns in its history, lasting 15 months (2/8/22–6/12/23)." These dates refer to the period between February 8, 2012 and June 12, 2013. They stated that "the longest period prior was just under a year" (November 14, 2014, to October 31, 2015), drawing parallels to the previous longest economic downturn.
The bullish view held by Pantera is not based entirely on historical facts alone. The company thinks that recent favorable developments in the cryptocurrency industry, such as "the XRP ruling and endorsements by BlackRock et al.," in conjunction with the impending halving of the Bitcoin supply in April 2024, constitute a strong mix for the possibility of a bull market for digital assets. They stated: "Our view is that we've seen enough – there's just so long that markets can be down."
The halving event is important in the Bitcoin ecosystem. This event refers to a pre-programmed reduction in the Bitcoin block reward given to miners. "Every four years that 'block reward' is cut in half, and as a result, it's referred to as 'the halving,'" explains Pantera. This procedure is scheduled to continue until the year 2140, ensuring that there will never be more than 21 million Bitcoins in circulation. Pantera attributed such words to the fictitious creator of Bitcoin known as Satoshi Nakamoto and stated, "Total circulation will be 21,000,000 coins." When network nodes create blocks, they will be divided into them, and the quantity will be halved every four years.
PANTERA PREDICTION
Pantera made a bold prediction based on this information, which is as follows: "IF history were to repeat itself, the price of Bitcoin should have troughed December 30, 2022." The analysis indicates that the actual low was seen on November 9, 2022, during the FTX debacle.
As a result of the next halving, which is scheduled to take place on April 20, 2024, the mining reward will decrease from 6.25 Bitcoins to 3.125 Bitcoins per block. According to the findings of Pantera's research, the Efficient Markets Theory may be wrong, even though it proposes that a well-known occurrence should already be factored into prices; yet, history paints a different image.
In further explanation, they stated, "Bitcoin has historically bottomed 477 days prior to the halving, climbed leading into it, and then exploded to the upside afterwards." In addition, according to Pantera, the new cycle peak will occur 480 days after the halving, which would be in July 2025.
The firm's stock-to-flow price forecast model, which analyses the change in the stock-to-flow ratio throughout each halving, has been extremely helpful in their research and analysis. They observed: "The 2016 halving decreased the supply of new Bitcoins by only one-third as much as the first." Interestingly, it only had a third of the impact on the pricing.
Based on these tendencies, Pantera draws conclusions about the future price of Bitcoin and says, "If history were to repeat itself, the next halving would see Bitcoin rising to $35k before the halving and $148k after."
This prognosis is in line with other bullish forecasts made regarding Bitcoin. Notably, Tom Lee, an analyst at Fundstrat, has recently forecasted that the price of Bitcoin will reach $150,000 following the next halving. At the time of this publication, the cost of BTC was $26,537.
Reviewed by cryptopotato
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August 26, 2023
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