Bitcoin Eyeing $100,000 as Treasury Yields Fuel Crypto Rally

Fundstrat’s Sean Farrell, head of digital asset strategy, believes Bitcoin could surge past $100,000 before the end of 2024. He argues that rising Treasury yields, typically a headwind for risk assets like crypto, are setting the stage for Bitcoin’s next big rally. Farrell notes that Bitcoin has already formed a “durable” cycle low and a new cycle has likely begun. While his earlier target of $115,000 now seems out of reach for this year, he remains optimistic about a climb above $100,000.

Farrell’s bullish outlook is rooted in the U.S. fiscal situation. With debt exceeding 120% of GDP and a fiscal deficit around 6-7% of GDP, higher interest rates could exacerbate these issues. He cites a Congressional Budget Office report warning that a 1 percentage point rise in interest costs would significantly widen the 30-year deficit projection. The Treasury’s recent move to buy long-dated Treasuries using short-term bills is seen as a form of market intervention that could fuel inflation and drive demand for Bitcoin as a hedge.

The SEC’s innovation exemption, requiring tokenized stocks to be paired with stablecoins or money market funds, could further boost demand for short-term bills. Farrell suggests that if trillions in equities move on-chain, it will create more demand for these bills, benefiting Bitcoin. He also highlights Ethereum’s strong performance in the third quarter and Solana’s role as a higher-risk play in this trend.

Farrell advises investors not to expect a straight shot up, acknowledging the possibility of a 10% pullback. However, he believes buyers will quickly step in on any dip. He encourages a medium to long-term aggressive approach, particularly for those not using leverage.