Bitcoin has had a series of hyper-bullish developments that could potentially push its price above $1 million in the mid-term, according to crypto investment firm Mechanism Capital. Despite some poor market structure dynamics earlier this month, the leading catalyst for this potential explosion in value is Bitcoin’s adoption as a national treasury reserve asset.
Rumors are circulating that if Donald Trump is re-elected as President of the United States, he may promise a national Bitcoin reserve. While there are no guarantees that this will come to fruition, the mere possibility of such a move is seen as having asymmetric upside potential by investors today. Andrew Kang, co-founder of Mechanism Capital, believes that even with a low probability of scenarios with $500k+ or $1 million+ price targets, Bitcoin is currently undervalued.
If the US were to adopt Bitcoin as a national treasury reserve asset, Kang predicts that other nations would be inspired to follow suit. There are also rumors of a major Asian conglomerate potentially taking a similar approach to MicroStrategy and Coinbase in the west, providing exposure to the Bitcoin and broader crypto ecosystem.
Bitcoin recently surged to a monthly high of $67,000, following positive regulatory developments such as the approval of Ethereum spot ETFs for public trading by the SEC. Experts predict that the first Ethereum ETFs will go live next week. While Bitcoin faced some challenges in late June and early July due to the German government selling seized BTC, those sales are now over. Some analysts believe that Bitcoin stablecoin liquidity must increase before another bull market swing phase can begin.
There is speculation that political factors are also playing a role in boosting Bitcoin’s price this week. Betting odds on Polymarket increasingly favor President Joe Biden abandoning his 2024 re-election bid, which could have implications for the cryptocurrency market.
Bitcoin’s potential for reaching a price level above $1 million is driven by a combination of positive market dynamics, rumors of national adoption, and global trends in cryptocurrency adoption. While there are no guarantees in the volatile world of cryptocurrencies, the current environment presents intriguing opportunities for investors looking at Bitcoin’s long-term potential.