Bitcoin's Explosive Growth Potential in Current Cycle
Real Vision analyst Jamie Coutts argues that Bitcoin (BTC) has the potential to increase significantly, possibly reaching a six-figure price point during the current market cycle. Coutts observes that while Bitcoin's growth might be less dramatic compared to previous cycles, it still holds substantial potential.
Historical Context: Bull Cycles of 2017 and 2020
In the past, Bitcoin saw a dramatic rise of 19X in 2017 and 6X in 2020. However, for this cycle, Coutts predicts a more modest increase of 2X to 3X. To understand what this means, if Bitcoin's price was $30,000, a 3X increase would take it to $90,000.
The Role of the US Dollar Index (DXY)
For Bitcoin to achieve this target, Coutts emphasizes the importance of the US Dollar Index (DXY). The DXY measures the strength of the US dollar against other major currencies. A decline in DXY, indicating a weaker dollar, could boost Bitcoin's price. Presently, the DXY stands at 102.65, but Coutts suggests it needs to fall below 101 for Bitcoin to hit its potential target.
Global Liquidity Impact
Coutts also highlights his global liquidity model, which had previously forecasted a 75% rally for Bitcoin in November 2023. He notes that central banks, especially the Bank of Japan (BoJ) and People’s Bank of China (PBoC), are significantly contributing to global liquidity. For instance, in the past month, these banks have injected $400 billion and $97 billion, respectively, increasing the global credit supply by $1.2 trillion. This increase is partially due to a strategic decline of the US dollar, possibly with the consent of the Federal Reserve.
Conclusion
Coutts' analysis suggests that with declining US dollar strength and increased global liquidity, Bitcoin could potentially triple in value this cycle. However, as always, investors should conduct thorough research before making investment decisions in the volatile cryptocurrency markets.
Disclaimer: Opinions expressed are not investment advice. Investors should perform due diligence before engaging in high-risk investments in Bitcoin or other digital assets.
