BitcoinBTC and cryptocurrencies—including ethereum and XRPXRP—have rocketed back into the limelight this year amid predictions the Federal Reserve and China could be about to “flood the world” with trillions of dollars.
The bitcoin price has surged almost 200% since this time last year, helping the combined ethereum, XRP and crypto market top $1.5 trillion for the first time since early 2022 thanks to soaring expectations Wall Street is gearing up to explode into the market.
Now, as rumors swirl of a secret “sovereign” bitcoin bid, crypto analysts are predicting the huge bitcoin price rally could be turbo-charged in 2024 as the Federal Reserve restarts its money printer and “debases” the U.S. dollar.
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“If the easing of financial conditions plays out the way the market is expecting, and we see rate cuts in the middle of next year, as well as an increase of global liquidity which seems likely—these factors would be positive to support a sustained rally and we very well could see $70,000 [per bitcoin] by year-end 2024 as a conservative estimate,” Luke Nolan, a research associate at crypto asset manager CoinShares, said in emailed comments.
The Fed is widely expected to begin cutting interest rates next year following its historical tightening cycle as the rate of inflation slows, with some still expecting the economy to fall into recession.
“Gold has noticed that, bonds have noticed that, and bitcoin has noticed that,” Zach Pandl, a former Goldman Sachs analyst now with crypto asset manager Grayscale, told the Financial Times and adding bitcoin is the only “obvious competitor currency” in the event that the U.S. dollar is “debased.”
Huge government spending and Fed money printing since the 2008 financial crisis—sent into overdrive by the Covid pandemic and economically devastating lockdowns—has led to fears the U.S. dollar could be headed for collapse.
In October, Jefferies’ analysts warned the Fed will be forced to restart its money printer in 2024—potentially collapsing the U.S. dollar and fueling a bitcoin price boom to rival gold.
“G7 central banks, including most importantly the Federal Reserve, will not be able to exit from unconventional monetary policy in a benign manner and will ultimately remain committed to ongoing central bank balance-sheet expansion in one form or another,” Christopher Wood, global head of equity strategy at Jefferies, wrote in a note to clients.
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Earlier this year, Balaji Srinivasan, the former chief technology officer at crypto exchange Coinbase and a former partner at venture capital company Andreessen Horowitz, predicted “hyper-inflation” would push the bitcoin price to $1 million by mid-June, putting up $1 million to back his prediction.
Srinivasan lost his $1 million bitcoin price prediction but said he succeeded in warning people the U.S. dollar is under threat.
“I just burned a million to tell you they’re printing trillions,” he posted to Twitter, now X. “I spent my own money to send a provably costly signal that there’s something wrong with the economy, and that it’s not going to be a ‘soft landing’ like [Federal Reserve chair Jerome] Powell promises—but something much worse.”
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