The world's largest cryptocurrency, Bitcoin (BTC 0.71%) has been grinding higher again, with its price briefly surpassing its all-time high and reaching more than $126,000 on Oct. 6, continuing a run of 30% this year so far. It's once again flirting with fresh record prices and reigniting one question in particular on many investors' minds.
Can it clear $130,000 before 2026?
Image source: Getty Images.
There aren't many obstacles ahead
After such a good year, it's natural for investors to wonder if there's much gas left in the tank with this asset. And there is -- potentially quite a lot, in fact.
We're now more than a year and a half out from the most recent halving in April 2024, when Bitcoin's new daily issuance from mining fell to roughly 450 new coins per day, down from about 900 before that. As a reminder, the coin's maximum supply is still 21 million, and the overwhelming majority of that sum is already in circulation. So as long as there are people trying to buy Bitcoin, they will be competing with each other in the form of bidding for higher prices to secure some of the supply, and they will never see more coming onto the market each day than they do right now.
CRYPTO: BTC
Key Data Points
On the demand side, the spot exchange-traded fund (ETF) market has become a meaningful new buyer that's also driving prices higher. In the week ended Oct. 4, global crypto ETFs took in a record $5.9 billion, led by U.S. ETF products, as Bitcoin reached new highs. There have also been sustained positive net inflows over time, which is a clear sign that adoption among financial institutions is broadening.
If you put those pieces together, a push to $130,000 is a relatively small step from the coin's recent record. It would be only a few percentage points above the latest highs, well within the band of normal month-to-month variation during strong uptrends. So it's probably inevitable.
Of course, if the macroeconomic picture degrades suddenly, all bets are off, but that's always the case. The key is that today's setup still skews outcomes upward so long as buyers keep showing up. And for one big reason in particular that we're about to get into, the probability of buyers continuing to demand Bitcoin is very, very high.
The dollar debasement trade is surging
The most interesting driver of Bitcoin right now is macro.
As you may have heard, the dollar debasement trade is the idea that investors tilt toward scarce, non-fiat currency assets when they fear a decline in a currency's purchasing power or worry about long-run fiscal sustainability. Both of those fears are alive and well with regard to the U.S. dollar at the moment.
There is ample data to justify the concern. The purchasing power of the U.S. consumer dollar has trended lower for decades, reflecting cumulative inflation; the recent surge in inflation since 2022 has aggravated the trend. Meanwhile, official projections show persistent and large deficits and rising federal debt over the coming decade, which can amplify worries about future inflation or currency weakness.
In that environment, assets with credibly scarce supply tend to look attractive. Gold's bid in 2025 is one example, as it's performing better than it has in decades. Bitcoin's fixed cap and halving schedule give it similar scarcity characteristics, but with global portability.
If the debasement narrative persists and ETF channels continue to funnel capital into Bitcoin, new highs are extremely likely and reaching $130,000 before 2026 is very plausible, and perhaps far too conservative a price target. So what are investors going to do about it?
Consider dollar-cost averaging into Bitcoin to avoid anchoring to any single price print, and give the scarcity investment thesis a few years to play out rather than weeks. If the debasement trends endure and ETF demand keeps absorbing coins, the market will blow through $130,000 quite soon.
