Bitcoin (BTC) Price Predictions for 2024 and 2025: $150,000 or $500,000?

Throughout the first six months of 2024, you've probably heard all sorts of ultra-bullish predictions for where the price of Bitcoin (BTC) could be headed next.

Bitcoin (CRYPTO:BTC) had a rough 2023. After rallying to a (then) all-time high of $69,000 in November 2021, Bitcoin traders had high hopes for 2022. Instead, Bitcoin began 2022 trading around $47,000 and ended the year around $16,500. Ouch.

But Bitcoin traders had another chance to get excited in early 2023. Bitcoin started the year around $16,500 and quickly rallied to $26,000 by mid-March. Since then, Bitcoin has traded largely sideways for the past three months.

Now what

Bitcoin traders are waiting for the next big move, and billionaire venture capitalist Chamath Palihapitiya thinks he knows when it will happen. In a recent interview with Axios, Palihapitiya outlined two key catalysts that could propel Bitcoin to $500,000 by October 2025.

"Two halvings from now, which is October '25, I think you'll see Bitcoin at $500,000," said Palihapitiya. "I think the way to model it is to take the last halving, which is three months, went up 1.37 times. We're currently at 1.3 times. So, you multiply that out. And then you'll see the price appreciation begin to happen."

The first catalyst is the Bitcoin halving. As you probably know, Bitcoin miners are rewarded with new Bitcoin for each block they add to the Bitcoin blockchain. This reward started at 50 Bitcoin in 2009 and is halved about every four years. We are currently on the seventh halving period, which started in April 2024. During this period, Bitcoin miners are being rewarded with 6.25 Bitcoin for each block they add to the blockchain.

When the next halving occurs in 2024, the reward will be reduced to 3.125 Bitcoin per block. This halving event is a big deal among Bitcoin traders because it has a profound effect on the price of Bitcoin. In previous halving cycles, Bitcoin has tended to rally significantly in the months and years following the event.

Palihapitiya analyzed Bitcoin's price performance over three-month, 12-month, and 18-month intervals following the last halving in April 2020. He found that Bitcoin's price increased by 1.37 times, 6.51 times, and 7.8 times, respectively, during these periods.

Using these numbers, Palihapitiya constructed a potential timeline for how Bitcoin's price might increase over the 2024 halving cycle. We can probably expect the price of Bitcoin to trade largely sideways through much of the summer, which marks the first three months of the cycle. But the price of Bitcoin could start to heat up as we head into the fall and winter. By next April, the price of Bitcoin could be well on its way to $500,000.

The second key factor is Bitcoin's growing opportunity to become a global reserve asset. According to Palihapitiya, non-Western nations are increasingly likely to become "dual currency," meaning they will choose to hold both their domestic currencies and Bitcoin.

"The non-Western world is going to become dual currency," said Palihapitiya. "They're going to hold their local fiat and then they're going to choose one global reserve asset. You're going to see the petrodollar arrangement begin to fray at the edges."

Palihapitiya pointed out that the U.S. is adding $1 trillion in new debt every 100 days and that its budget deficits are becoming worrisome. The more debt the U.S. takes on, the more money it needs to print, and the less valuable the dollar becomes. He refers to this process as "dollar debasement."

Given this context, it's possible to understand why some non-Western nations may not want to hold dollars anymore. Case in point: Saudi Arabia is rethinking its petrodollar arrangement with the United States. This arrangement, which has lasted 50 years, is arguably one of the most important underpinnings of the modern global economy. It forces everyone in the world to buy dollars to buy oil, and it ensures constant demand for U.S. debt.

If nations around the world start to hold fewer dollars, it could open the door for Bitcoin. Add in the fact that many institutional investors now view Bitcoin as a form of "digital gold," and it's easy to see the path for Bitcoin to become a reserve asset. At some point, Palihapitiya thinks Bitcoin might replace gold entirely.