Is US$100K Bitcoin Inevitable?

Predicting the future price of this volatile asset is nearly impossible, but I believe US$100,000 could be within reach shortly. Here’s why. 

| More on:
cryptocurrency, crypto, blockcahin

Image source: Getty Images

Bitcoin is up sharply this week, as regulators in the United States get one step closer to approving a BTC futures contract. Some early investors are now wondering if the digital asset could breach the psychologically crucial barrier of US$100,000. 

Predicting the future price of this volatile asset is nearly impossible, but I believe US$100,000 could be within reach shortly. Here’s why. 

Prediction models

Sophisticated commodity investors have used a financial model called “stock-to-flow” to predict the future prices of precious metals. The model measures the current stock of a physical commodity against the annual increase in supply from mining to arrive at a rough prediction. 

This model has been helpful for traders betting on gold or palladium futures. Now, some are applying this model to Bitcoin, too. According to the model, the price of each BTC should have crossed US$100,000 weeks ago. That’s convinced some investors that BTC’s rise through six figures is inevitable. 

Growing adoption

Millions of retail investors have adopted cryptocurrencies for the first time over the past year. Bitcoin was, unarguably, on the top of their list. 

However, bigger players have been getting involved, too. Several hedge funds have added BTC to their portfolio, while major tech firms have added it to their balance sheet. El Salvador even made it legal tender, which opens the door for other countries to do the same. 

This week, Russia’s president Vladimir Putin said cryptocurrencies had some “value,” and that Russia was keen on alternatives to the U.S. dollar for global oil trade. That’s yet another sign that the demand for BTC is immense, while the supply is capped at 21 million. This wave of new demand could also push Bitcoin’s price beyond US$100,000. 

Digital gold

Most investors now consider Bitcoin the digital version of gold. Whether Bitcoin is a safe haven during economic upheaval or inflation remains to be seen. But if the digital asset really disrupts gold, it could be worth as much as US$10 trillion. That implies a valuation of roughly US$475,000 for each unit of BTC. 

Even if BTC never fully replaces gold, US$100,000 seems within reach. 

How to invest in Bitcoin

The best way to buy Bitcoin in Canada is an exchange-traded fund like Purpose Bitcoin ETF (TSX:BTCC.B). Purpose buys and holds a fixed number of BTC per unit, which means it tracks the market performance of this digital asset. At the moment, each unit of BTCC represents 0.00016606 Bitcoin. 

The management fee is capped at 1%, and the fund has over $1.6 billion in assets under management. 

The reason this is the best way to buy Bitcoin is because it’s eligible for registered tax accounts. In other words, you can hold BTCC in your Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan. If Bitcoin ever crosses the US$100,000 milestone, holding this ETF in a TFSA will help you mitigate capital gains taxes. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Tech Stocks

Business success with growing, rising charts and businessman in background
Tech Stocks

Growth Stocks: A Once-in-a-Lifetime Opportunity to Get Rich

Here's why investing in quality growth stocks such as Docebo and Datadog may allow you to generate sizeable returns.

Read more »

analyze data
Tech Stocks

Buy the Dip: 3 TSX Stocks and ETFs Worth Your Attention

As the year nears the end, it is time to buy some stocks and ETFs at the dip and book…

Read more »

Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks
Tech Stocks

Is Shopify Stock Worth a Buy in December?

Shopify stock has almost doubled in 2023. While results continue to impress, it's trading at lofty valuations fueled by sky-high…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

3 Top E-Commerce Stocks to Buy on the TSX Today

These e-commerce stocks have already shown some signs of improvement, but 2024 could be huge for today's investor.

Read more »

exchange traded funds
Tech Stocks

The ABCs of Diversifying Away From SPY Stock for Canadians Investing in the U.S.

If SPY stock is your only country-level diversification, you are missing out on some opportunities. Here are the ABCs of…

Read more »

A worker uses a double monitor computer screen in an office.
Tech Stocks

2 Top Fintech Stocks to Buy on the TSX Today

Consider buying these two top fintech stocks if you want to inject solid long-term growth potential into your self-directed investment…

Read more »

Businessman holding AI cloud
Tech Stocks

Revolutionizing Industries: Why Every Canadian Should Consider AI Stocks

Canadian tech stocks like Shopify Inc (TSX:SHOP) use AI to improve customer experiences.

Read more »

edit Women wearing red sweater shopping online and using credit card at home office
Tech Stocks

Up 58% Since November: Is Nuvei Stock a Buy Today?

Given its high-growth prospects and cheaper valuation, the rally in Nuvei could continue.

Read more »