#1 Best Cryptocurrency to Buy Now Before It Rises 1,000%, According to Wall Street Analyst

The cryptocurrency industry has been in turmoil for over two years. This began with a move away from risky assets as concerns about a recession in late 2021 rattled the economy. soil The blockchain ecosystem began a series of bankruptcies and forced liquidations that drove the market further down.

When the market finally bottomed, overall value destruction exceeded $2 trillion. but bitcoin (BTC -7.94%) The cryptocurrency market has seen a resurgence in recent months as two potential tailwinds have captured the attention of investors. These are the pending approval of spot Bitcoin exchange-traded funds (ETFs) and the reduction of Bitcoin mining rewards later this year.

The first catalyst has already borne fruit. The U.S. Securities and Exchange Commission (SEC) on Wednesday approved 11 spot Bitcoin ETF applications, including proposals from two of the world’s top three asset managers. black stone And fidelity. This could spark interest among retail and institutional investors, and the resulting increased demand could push Bitcoin prices higher.

In fact, some Wall Street analysts expect Bitcoin’s value to increase three to four times by 2025, while another analyst believes Bitcoin’s value could increase tenfold over the next five years.

Approval of spot Bitcoin ETFs could increase demand

The SEC began approving Bitcoin futures ETFs in October 2021. These products do not track price accurately as they invest in futures contracts rather than the cryptocurrency itself. As a case in point, ProShares Bitcoin Strategy ETF Despite a 39% return over the past six months, Bitcoin is up 54% over that period.

Spot Bitcoin ​ETFs invest directly in Bitcoin and track its price closely. The appeal of these products is that they provide direct exposure to Bitcoin without the hassle of a cryptocurrency exchange or blockchain wallet. Investors can simply purchase shares of a spot Bitcoin ETF through their existing brokerage account. This could increase demand from retail and institutional traders.

To be specific, the price of Bitcoin is determined by supply and demand, but since the total supply is fixed at 21 million coins, of which approximately 19.6 million have been created, the only variable in the outcome is demand. Therefore, if the accessibility provided by spot Bitcoin ETFs leads to more demand among retail and institutional investors, the price of Bitcoin could skyrocket in the coming months and years.

Some Wall Street analysts see this as a possible outcome, especially with future reductions in mining rewards, given the participation of reputable financial institutions such as BlackRock and Fidelity as ETF issuers. In fact, Bernstein analyst Gautam Chhugani believes Bitcoin could reach $150,000 by 2025, implying an upside of 210%. Standard Chartered Bank analyst Geoff Kendrick said Bitcoin could reach $200,000 by 2025, implying an upside of 313%. And Fundstrat analyst Tom Lee says $500,000 could be reached by 2029, which would imply a 1,000% upside.

Declining Bitcoin mining rewards may reduce selling pressure.

Bitcoin mining rewards are halved every 210,000 blocks added to the blockchain, which happens approximately once every four years. The next Bitcoin halving event will occur in April 2024. Analysts believe this will lead to a significant reduction in selling pressure. Simply because miners will see a 50% decrease in Bitcoin inflow. This means that you will only have half the amount of cryptocurrency left to sell.

To quantify this, MicroStrategy Former CEO Michael Saylor believes selling pressure will reduce from $12 billion per year to $6 billion per year after Bitcoin mining rewards were cut in half in April. A decrease in selling pressure equates to an increase in demand and could potentially push the price of Bitcoin higher.

In fact, Saylor predicted that Bitcoin will reach $500,000 over the next decade in 2022, which implies an upside of around 1,000%. However, he was recently quoted as saying that Bitcoin could reach $5 million at some point in the future. This represents an upside of 10,230%, which on the face of it is an absurd figure. However, there is historical precedent for halving events that boost the price of Bitcoin.

The chart below lists past halving dates and details the returns Bitcoin has generated over the following two years.

Data source: Fidelity.

The bottom line is: Two catalysts could send Bitcoin skyrocketing in the coming months and years. Therefore, now is a good time to buy small positions. However, investors should remember that cryptocurrencies are a young, volatile and risky asset class. Bitcoin has fallen more than 45% at least four times in the past five years, and a similar downturn is possible (though unlikely) in the future.