Bitwise CIO Matt Hougan says three conditions could pave the way for Bitcoin (BTC) to rise to the $80,000 level before the end of the year.
In a new note to investors, Hougan points to a prediction Bitwise made in late 2023 predicting that BTC would trade above the $80,000 level by 2024.
With the fourth quarter approaching, the investor is now say that to reach the price target, Bitcoin needs three conditions to unfold.
Hougan’s first condition is elections that deliver “anything but a democratic victory.” While a Republican victory would bode well for crypto, the CIO says things are more nuanced on the Democratic side.
“To thrive, bitcoin doesn’t need politicians. It’s just necessary that they get out of the way. And barring a Democratic breakthrough in both houses of Congress and the White House, I suspect this will be the case, with Democrats taking a more neutral approach to the industry.”
The second condition for a Bitcoin rally in the fourth quarter is two more interest rate cuts by the Federal Reserve, according to Hougan.
Following the Fed’s rate cut in September, Hougan says markets are “starving for more” and could be disappointed without interest rates.
“The market is hungry for more. Currently, the country expects an additional 50 basis points of easing from the Federal Reserve by the end of the year, as well as additional fiscal stimulus from China.
If it’s both, I suspect we’ll get our Q4 rally. If we don’t do that, I think the disappointment could weigh on the market.”
Hougan’s final condition for a fourth-quarter melt-up is simply that “no major negative surprises” overwhelm the markets, such as major hacks, lawsuits or locked coins unexpectedly hitting the market.
“The history of Crypto has unfortunately been plagued by countless such surprises. Over the past few quarters, the release of previously blocked Bitcoin from the failed Mount Gox exchange and from government coffers has helped keep us within the ballpark.
If we can get through the end of the year without similar shocks, I expect new record highs and much more.”
Hougan also notes that a broader crypto market rally boosting altcoins could spread to Bitcoin and “seal the deal” much more.
At the time of writing, Bitcoin is trading at $61,457.
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