Bitcoin Poised for $100,000 by Year-End Amid Market Correction, Says Bitwise CIO

Bitcoin Poised for $100,000 by Year-End Amid Market Correction, Says Bitwise CIO

The recent correction in the cryptocurrency market may present a lucrative opportunity for long-term investors, with several key factors potentially driving Bitcoin to $100,000 by the end of the year.

Matt Hougan, the Chief Investment Officer at Bitwise, a prominent crypto asset management firm, shared his insights in a recent investor note on Wednesday. His comments came a day before the latest U.S. inflation data revealed a decrease for June.

Hougan highlighted several factors that could support Bitcoin’s rise: inflows to U.S. spot Bitcoin exchange-traded funds (ETFs), reduced supply post-halving, the anticipated launch of Ethereum spot ETFs, potential U.S. Federal Reserve rate cuts, and a changing political landscape in Washington.

“The crypto market is experiencing a peculiar situation right now,” Hougan stated. “The short-term news is predominantly negative, but the long-term news remains positive. This contrast creates a significant opportunity for long-term investors.”

On Thursday, the U.S. Bureau of Labor Statistics reported a 0.1% drop in the Consumer Price Index (CPI) for June, following a stagnant May. This marks the first decline in the index since May 2020.

“Tonight’s CPI release has grabbed everyone’s attention,” noted QCP Capital in a brief statement on Thursday. “This optimism has fueled a continued rally in equities, yet it has not been fully reflected in the crypto market.”

A decline in inflation could reinforce the Fed’s decision to cut rates this year, which would benefit risk assets like Bitcoin.

Rate cuts could potentially occur as soon as September, with traders estimating an 84.6% probability, according to the CME FedWatch Tool.

This timing could be advantageous for investors, as Bitcoin’s supply dwindles post-halving, increasing mining difficulty and pushing some miners to capitulate.

Despite concerns from Mt. Gox creditors and Bitcoin sales from Germany, these factors are unlikely to outweigh the demand from ETFs, as previously reported by Decrypt.

Since their launch in January, spot Bitcoin ETFs have accumulated approximately $15 billion in net new assets. However, they have yet to receive approval from major wealth management platforms like Morgan Stanley and Wells Fargo.

“When that approval comes—likely later this year—we can expect billions more to flow in,” Hougan predicted.