In a recent deep dive into Bitcoin’s historical performance and future potential, Pantera Capital, the fifth-largest crypto hedge fund by AUM, has projected a staggering $148,000 price target for BTC post its next halving event.
When Bitcoin Price Could Reach $150,000
The “Blockchain Letter” released by Pantera Capital meticulously analyzes BTC’s past halving events and their subsequent impact on its price. The firm noted, “Bitcoin experienced the longest period of negative year-over-year returns in its history, lasting 15 months (2/8/22–6/12/23).” Drawing parallels to the previous longest downturn, they added, “The longest period prior was just under a year (11/14/14–10/31/15).”
Pantera’s bullish sentiment is not solely based on historical data. The firm believes that recent positive developments in the crypto space, such as “the XRP ruling and endorsements by BlackRock et al.,” combined with the upcoming Bitcoin halving in April 2024, create a potent mix for a potential bull market for digital assets. They stated, “Our view is that we’ve seen enough – there’s just so long markets can be down.”
The halving event, a pre-programmed reduction in the BTC block reward for miners, is a significant event in the Bitcoin ecosystem. As Pantera explains, “Every four years that ‘block reward’ is cut in half, thus it’s referred to as ‘the halving’.” This process is set to continue until 2140, ensuring that only 21 million Bitcoins will ever exist. Citing Satoshi Nakamoto, the pseudonymous creator of Bitcoin, Pantera quoted, “Total circulation will be 21,000,000 coins. It’ll be distributed to network nodes when they make blocks, with the amount cut in half every four years.”
Drawing from this, Pantera made a bold prediction: “IF history were to repeat itself, the price of Bitcoin should have troughed December 30, 2022.” The analysis further notes that the actual low was observed on November 9th, 2022, amid the FTX fiasco.
The upcoming halving, slated for April 20, 2024, will see the mining reward drop from 6.25 BTC to 3.125 BTC per block. Pantera’s analysis suggests that even though the Efficient Markets Theory posits that such a well-known event should already be priced in, history paints a different picture.
They elaborated, “Bitcoin has historically bottomed 477 days prior to the halving, climbed leading into it, and then exploded to the upside afterwards.” Furthermore, according to Pantera, the new cycle high will come 480 days after the halving, in July 2025.
The firm’s stock-to-flow price projection model, which examines the change in the stock-to-flow ratio across each halving, has been instrumental in their analysis. They observed, “The 2016 halving decreased the supply of new Bitcoins only one-third as much as the first. Interestingly, it had exactly one-third the price impact.”
Drawing from these patterns, Pantera concludes, “If history were to repeat itself, the next halving would see Bitcoin rising to $35k before the halving and $148k after.”
This projection aligns with other bullish forecasts in the Bitcoin space. Notably, Fundstrat’s Tom Lee also recently predicted a $150,000 price point for BTC after the next halving. At press time, BTC traded at $26,537.
Featured image from iStock, chart from TradingView.com