Heading into this year, crypto investors expected big things from Bitcoin (BTC +2.78%). The conventional wisdom was that Bitcoin would double in value, eventually hitting a price of $200,000 by December.
But that simply hasn't happened. In fact, Bitcoin is now down almost 4% for the year (as ofm Dec. 11), and is currently trading for less than $100,000.
But not to worry. Bitcoin may just be a year behind schedule. According to Wall Street analysts, there's now reason to think that Bitcoin might actually hit a price of $250,000 by the end of 2026. So are they right?
A mind-blowing prediction for Bitcoin
Somewhat surprisingly, 12-month price targets for Bitcoin remain extremely bullish. Even with Bitcoin's recent pullback of almost 30% from its record high, for example, J.P. Morgan is holding out hope that Bitcoin can make it to the $170,000 level next year.
But there's an even more bullish price target out there, and it might just blow your mind. Tom Lee of Fundstrat is now calling for Bitcoin to hit a price of $150,000 to $200,000 by early next year, before eventually soaring to a price of $250,000 by the end of 2026.
Image source: Getty Images.
There are two good reasons this might happen. The first reason is institutional adoption. In other words, large institutional investors and major Wall Street banks continue to buy Bitcoin for their portfolios, regardless of what the price of Bitcoin is doing. This is helping to offset sell pressure from retail investors.
The other reason is that some corporations are starting to add Bitcoin to their balance sheets as a treasury asset. The trend started with so-called Bitcoin treasury companies, which do nothing but buy and hold Bitcoin. But there are signs that mainstream corporations, especially those in the tech sector, are now eyeing Bitcoin for their balance sheets.
As Charles Hoskinson, co-founder of both Ethereum and Cardano, has pointed out, tech companies in Silicon Valley might decide to accumulate Bitcoin. If that happens, the price of Bitcoin could really skyrocket.
But what about Bitcoin's four-year cycle?
So far, so good, right? Even with Bitcoin's price in decline, big financial institutions are still buying Bitcoin. Corporations are thinking about buying Bitcoin. And the U.S. government, via the planned Strategic Bitcoin Reserve, might decide to accumulate Bitcoin in 2026.
CRYPTO: BTC
Key Data Points
The problem is that Bitcoin tends to follow a four-year cycle of boom and bust. It's impossible to predict the exact start and end dates of the cycle, of course, but we do have some clues.
The bullish phase of the cycle usually kicks off with the Bitcoin halving, which takes place every four years. From there, there's usually a period of 12 to 18 months when the price of Bitcoin take off. After that, there's a crash.
So here's the really worrisome part: The Bitcoin halving took place in April 2024. That means we're already more than 18 months into the really bullish phase of the cycle. That could help to explain why Bitcoin is down nearly 30% from its October highs. Maybe the bust phase of the cycle has already started.
So if you buy into the argument that Bitcoin is headed to $250,000 next year, you also need to buy into the argument that Bitcoin's four-year cycle is a relic of the past. Conveniently, investment firm Bernstein is predicting exactly that. According to Bernstein, new institutional buying will prop up Bitcoin's price. As a result, Bitcoin is now in an "elongated" cycle that could last for another few years.
What do prediction markets think?
Other potential clues as to Bitcoin's future price comes from online prediction markets. Here, online traders are predicting that Bitcoin has a 10% chance of hitting the $250,000 price level by 2027. If Bitcoin has a strong year-end rally, that percentage is almost guaranteed to rise, as traders absorb the new information.
For crypto investors, the big wild card factor is the four-year cycle. Is Bitcoin destined to repeat history yet again, or has something fundamentally changed with Bitcoin?
With that in mind, keep a close eye on how Bitcoin closes out the year. Historically, Q4 has been the best quarter of the year for Bitcoin. So if Bitcoin is able to eke out a gain for the quarter, it could set the stage for a mind-blowing rally in 2026.
