Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, has explained why the upcoming halving event could push the price of the apex cryptocurrency to an eye-watering $280,000.
Charles Edwards Shares Bullish BTC Price Outlook Post-Halving
Bitcoin’s future is overwhelmingly bright ahead of the anticipated miner rewards halving in April. This is the opinion of Bitcoin commentator and fund manager Charles Edwards.
Edwards sees a potential 500% breakout in the price of Bitcoin if the crypto replicates its historic halving pattern. In his opinion, if BTC’s post-halving rally remains consistent with 2020, the flagship crypto could hit $280,000 in 2025.
The upcoming halving will see the amount of BTC awarded to miners slashed in half as a way of keeping the asset’s inflation rate in check. It is expected to happen in late April and will be the fourth such event since Bitcoin’s launch in 2008. Market watchers are convinced the halving will drive the price of Bitcoin higher because the supply of the crypto will become scarcer than it already is.
While it is possible to argue that this cycle’s returns are much lower, Edwards says the 2020 cycle’s performance was basically “mediocre and an outlier”.
The Capriole CEO asserted that 2020 was the worst Bitcoin bull market in history. He attributes BTC’s lacklustre performance at the time to the 50% attack on the mining network by the Chinese government and the most aggressive Federal Reserve tightening phase in history. Edwards noted that these were two major headwinds, but their extent is unlikely to be witnessed again in the coming two years.
He expects 2024 to be the complete opposite of 2021. The Fed has adopted a quantitative easing policy strategy, with Fed Chairman Jerome Powell predicting three cuts this year. As such, the fund manager thinks a weakened dollar will predate a stronger Bitcoin.
Spot BTC ETFs To Amplify The Halving’s Market Impact
Grayscale Investments lodged a lawsuit and won a judgment against the U.S. Securities and Exchange Commission (SEC), forcing the regulator to finally greenlight spot Bitcoin exchange-traded funds (ETFs).
Charles Edwards considers the Jan. 10 approvals “as powerful as the second halving”. He observed that when the Gold ETF was launched back in 2004, the overall market cap of the precious metal was four times that of BTC today. With a current market value of around $3.2 trillion, gold enjoyed a meteoric ascent of over 300% to $13 trillion in under seven years.
Today, Bitcoin’s market cap stands at approximately $830 billion. The Capriole Investments boss is convinced that smaller assets have the potential to register larger upside returns. This suggests that a 300% price appreciation over the next two to five years spurred solely by the spot ETFs would actually be very conservative for the OG crypto. Additionally, a 500% return over the 18 months after the April halving would not be unusual for BTC based on historical trends. Combined, this would mean Bitcoin rallying by a whopping 800%.
“When you drill it down to the two most important factors for Bitcoin this cycle, and add them together, it’s easy to arrive at a conservative Bitcoin price of $300K in the next couple of years,” Edwards summarized.
That being said, Edwards urged investors to do their own research before making any investments as a lot can happen between now and then to trigger a rise or fall in these numbers.