Bitcoin (BTC 3.50%) is far from being an asset that's only upwardly mobile during fits of speculative frenzy. In fact, certain structural forces working in its favor right now could propel its price past $250,000 during the next 18 months. That's roughly 2.5 times its current price of about $106,000.
Here are three of the most important of those forces. Take note that all three will still be in play for the long term, which will support higher prices whether the coin passes the arbitrary line of $250,000 by the end of 2026.
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1. Scarcity
Bitcoin's issuance is coded per its protocol to halve roughly every four years; the last halving happened in April 2024. Now, the block reward is so small that annually it results in new supply equal to about 1.8% of the total. And there can only ever be 21 million Bitcoin that exist, 19.9 million of which are already mined. Less and less supply is being produced, and even less is going to be produced in the future.
History shows previous halvings tend to presage significant rallies, and there's no reason to believe that trend will stop. At the same time, even in the absence of a recent halving, buyers need to compete with each other to buy coins because of how much of the supply is tied up in the hands of long-term holders who simply won't sell -- or has been lost.
These supply dynamics make for a mighty cocktail of upward price pressure even if there isn't much in the way of new buyers bringing in their capital. If those new buyers do show up -- like they are now, based on the coin's elevated price level -- it doesn't take much in the way of new marginal demand to spur major gains.
2. It could hedge against inflation
As briefly discussed above, Bitcoin is inherently deflationary rather than inherently inflationary like a fiat currency. And while it isn't completely proven to be an adequate store of value in terms of purchasing power as denominated in fiat currency, it probably does, simply as a result of it being impossible to print and in short supply.
The fly in the ointment is Bitcoin's volatility. The asset has lost as much as 80% of its value multiple times, and the odds are that it will probably again. Of course, it recovered and went on to make new highs each time, but it cannot be relied upon to do so in the future within any specific time period, though it probably will recover eventually.
Nonetheless, in the next few years, concerns about inflation are likely to emerge once again. The rising trade tensions in the U.S. as well as fiscal issues like the country's national deficit would be convenient to address by printing money at a faster pace than what investors might prefer. Given that issuing more currency could coincide with a new era of Bitcoin adoption, the coin's merit as an inflation hedge is going to be tested -- and soon -- which has a good chance of sending its price higher.
3. New holders are emerging
The final trend that could push the price of Bitcoin to more than double before the end of 2026 is the new classes of holders with deep pockets that are coming onto the scene.
Institutional investors in the financial industry, governments, and major companies around the globe are all opting to buy or hold Bitcoin. Generally, those players do not ditch their coins at the first signs of trouble because they can borrow fiat currency using their Bitcoin as collateral. Plus, they can bring a lot more capital to bear than individual investors can.
As their purchasing activity picks up, especially in countries where large portions of the financial system is located, like the U.S. and China, it will create more competition for a smaller pool of coins. That competition is happening now, and it will continue accelerating for at least the next year or so. And that's a big driver of higher prices, perhaps even as high as $250,000.
