The August rally
Crypto rose sharply in August. Ethereum (ETH) gained more than 25%, above about 28% at points, beating Bitcoin (BTC), which gained above 20%.
In May and June, market mood ran too hot in the wrong direction. MicroStrategy (MSTR) said it might sell Bitcoin for the first time, which scared the market and pushed sentiment down too far. That produced a low on June 30, which I believe was the bottom.
Since then, several positive things have lifted prices:
- The "debasement trade" came back, as some money moved into Bitcoin as a hedge against a weakening dollar.
- The SEC and CFTC gave favorable guidance for the next couple of years.
- The president talked about possible US buying of Bitcoin and other digital assets.
- A large short squeeze over the past couple of weeks forced bearish traders to buy back, adding fuel.
Price targets
Bitcoin (BTC) now sits around 77,000. The next stop is 100,000. My 12-month price target is 175,000, reached at some point around the middle of next year.
The current setup looks like January 2023, right after the bear market ended. June 30 was the low, and from here the path higher depends on real demand catalysts.
The Genius Act as the next catalyst
The main demand event on the calendar is Genius Act implementation in January 2027. I think the market has not yet priced this in.
Stablecoins are an easy, approachable way for regular consumers to get onto blockchain rails. They should bring many more users and more liquidity on chain. The behavior is simple - tap to pay - and people already learned it during COVID. There are already 5 billion digital payments users, so teaching them to use stablecoins is an easy step.
The last major access catalyst was spot ETF approval in January 2024. Once the market understood spot ETFs were coming - which clicked around October 2023 with the Grayscale court ruling - money poured in. Early estimates put inflows at maybe 5 billion to 10 billion over a couple of years; ETFs actually took in 20 billion in the first two months. The Genius Act looks like the same kind of setup, with a real dated catalyst the market may be underestimating.
Large tech platforms are already testing this. Meta (META) has a pilot running in a couple of countries, and I expect that to continue.
Technical signal
Bitcoin (BTC) recently cleared its 50-day moving average, moving above 81,000. That is a supportive sign as the recovery continues.
