Fundstrat analyst Tom Lee expects Bitcoin to finish the current year above $100,000, with a forecast that implies at least 5% upside in December from its current price of $95,000. This prediction is part of a broader bullish outlook for the cryptocurrency, driven by several key catalysts.
According to Lee, four major factors could drive Bitcoin higher: interest rate cuts, spot Bitcoin ETFs, halving events, and the potential designation as a strategic reserve asset under the incoming Trump administration.
Interest rate cuts by the Federal Reserve have put an end to aggressive interest rate hikes, making it easier for investors to take on risk. Spot Bitcoin ETFs, approved by the SEC earlier this year, have unlocked substantial demand and made it easier for investors to add Bitcoin exposure to existing brokerage accounts.
The upcoming halving event, which occurs every 210,000 blocks, reduces new supply and limits selling pressure. Additionally, President-elect Donald Trump’s proposal to make Bitcoin a reserve asset could boost demand and further legitimize the cryptocurrency among institutional investors.
However, investors should be aware that Bitcoin has historically been a volatile asset, with significant price swings in recent years. As such, it’s essential to approach this investment opportunity with caution.
For risk-tolerant investors, buying a position in the iShares Bitcoin Trust, which has a reasonable expense ratio of 0.25%, could provide a diversification opportunity at a time when many stocks are expensive by historical standards.
Source: https://www.fool.com/investing/2024/12/05/1-index-fund-to-buy-soars-160-in-2025-wall-street