It might not be that difficult to reach the coveted six-figure threshold. How about the data, though?
Many thought that Bitcoin (BTC 1.38%), the first cryptocurrency, had enough momentum to reach the six-digit mark of $100,000 after the original cryptocurrency reached an all-time high of almost $70,000 in November 2021. Bitcoin, however, fell as quickly as it rose and has kept on falling.
Bitcoin has decreased by more than 70% since reaching its record high in 2021. When bear markets and crypto winters hit, drops of this size are not uncommon, but historical data indicates that when these times of price devastation are over, increases can often come back just as quickly as they went.
There have only been three years in Bitcoin's history without at least a 48% return. Bitcoin would need to increase by 490% in order to reach $100,000 in 2023. Although it may seem impossible, twice in its history, Bitcoin has experienced yearly returns of over 490%.
Call me cynical, but I'm not convinced it will reach that point that quickly. We need to take a closer look at some patterns involving Bitcoin's halving events in order to better predict what 2023 may hold for Bitcoin and whether or not it will reach the $100,000 threshold.
Read more: Bitcoin Price Prediction
The price of Bitcoin is halved every four years, or every 210,000 blocks that are added to the blockchain. A halving reduces the rate at which new Bitcoin enters circulation by cutting in half the reward that Bitcoin miners receive. Three halves have already occurred: in November 2012, July 2016, and May 2020. The miner reward was once 50 bitcoins, but it has since dropped to just 6.25 bitcoins and will eventually drop to 3.125 bitcoins in May 2024.
A clearer picture is painted by halvings
Surprisingly, a few things become clear when we overlay the dates of prior halvings on Bitcoin's price trajectory. First, let me to clarify that these are averages and in no way provide justification for trying to time the market.
According to data from the last three halvings, Bitcoin's price typically reaches a bottom when the following halving is about 1 1/2 years away. Data indicate that we might have found a bottom, with the next halving being about 18 months away.
Between the lowest price and the subsequent Bitcoin halving, has historically progressively generated moderate gains. When the next halving occurs, Bitcoin typically trades around 60% of its prior all-time high. That would put the price of Bitcoin in May 2024 at roughly $40,000. Still a respectable return, but it would rule out the possibility of Bitcoin reaching $100,000 in 2023.
When Will Bitcoin Hit $ 100,000?
If Bitcoin ever reaches the $100,000 level, I think it won't happen until around 2025. The identical data that we have been analysing demonstrates that a new record high is typically attained 1 and a half years after the halving. Now that the price of Bitcoin has been halved, it is unclear how high it will rise. However, I am ready to wager that it will rise by 30% above its previous record high of around $70,000, breaking the six-figure mark.
Therefore, assuming historical tendencies continue, hopeful investors hoping for a return to the excitement of 2021 would likely have to wait until 2025 before a new all-time high is reached. But that isn't necessarily a bad thing. Instead, it ought to be seen as a chance. With prices down more than 70% and the likelihood of further losses appearing to be low, this could be an excellent opportunity to invest in Bitcoin in order to position oneself for future appreciation. Keep in mind that Bitcoin rewards the persistent and patient investor.
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