Crypto Analyst: Here’s Why Bitcoin Price Will Hit $100,000 This Year

The recent correction in the crypto market presents a unique opportunity for long-term investors, according to Matt Hougan, Chief Investment Officer at crypto asset manager Bitwise. Hougan predicts that the Bitcoin price could rise to $100,000 by the end of the year, despite the current market volatility.

Hougan bases his optimism on several factors. First, there are the inflows into US spot Bitcoin exchange-traded funds (ETFs), which he expects to increase. He also expects post-halving supply shortages that could positively impact Bitcoin’s price. The expected launch of Ethereum spot ETFs also plays a role in his prediction.

Additionally, Hougan predicts that interest rate cuts by the US Federal Reserve and a changing political landscape in Washington could have a positive effect on crypto prices. Together, these factors, he says, provide a counterbalance to the current price declines in the crypto market.

“The crypto market is in a weird dynamic right now,” Hougan said. “All the short-term news is bad, but all the long-term news is good. This contradiction creates an incredible opportunity for long-term investors.”

Will the Federal Reserve cut interest rates?

Hougan’s prediction comes after the U.S. Bureau of Labor Statistics reported on Thursday that the consumer price index (CPI) fell 0.1% in June, after a flat performance in May. This is the first decline in the index since May 2020.

A decline in inflation could encourage the Federal Reserve to cut rates this year, which could benefit risky assets like Bitcoin.

This could happen as early as September, with traders expecting an 84.6% chance of the rate cut going through, according to the CME FedWatch Tool.

Will the Bitcoin price rise sharply?

The timing may prove favorable for investors, as Bitcoin’s supply continues to shrink after the halving, forcing miners to capitulate due to the increasing difficulty of mining the cryptocurrency.

While investor sentiment is being weighed on by the overhang of Mt. Gox creditors and Germany’s Bitcoin sales, this will likely have little impact in light of ETF demand, Decrypt previously reported.

Since their launch in January, spot Bitcoin ETFs have attracted approximately $15 billion in net new assets. However, they have yet to be approved for use by major asset management platforms such as Morgan Stanley and Wells Fargo.

“When that happens—later this year, I suspect—we’ll probably see billions more flowing in,” Hougan said.

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