At a current price of $67,000, Bitcoin (BTC 0.38%) is now 46% below its all-time high of $126,000 from October. For more than four months now, there has been steady selling pressure on Bitcoin.
So it's perhaps no surprise that prediction market traders think Bitcoin has almost no chance of hitting $150,000 this year. But what if they're ignoring the bull-case scenario hiding in plain sight?
Current Polymarket odds for Bitcoin
Right now, Polymarket traders are giving Bitcoin a 10% chance of hitting $150,000 by the end of this year. That's remarkably low. By way of comparison, they are also giving Bitcoin a 10% chance of hitting $20,000 this year. In other words, they say it's just as likely that Bitcoin soars in value by 120% as it is that Bitcoin declines in value by another 70%.
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Moreover, Polymarket traders are giving Bitcoin little to no chance of regaining its all-time high of $126,000 from last year. Right now, there's a 22% chance that Bitcoin hits $120,000 and a 19% chance that Bitcoin hits $130,000. So, roughly, there's a 1-in-5 chance that everything goes back to normal for Bitcoin, according to the prediction market.
From my perspective, these are very low odds indeed. Consider that, just 12 months ago, the growing consensus was that Bitcoin was going to double in value from its (then) current price of $100,000 to hit $200,000 by the end of 2025. Even near the end of last year, it was easy to find Bitcoin price targets in the $150,000 to $200,000 range.
A bullish scenario for Bitcoin
The bull-case scenario for Bitcoin involves politics. And, specifically, the upcoming U.S. midterm elections in November. The thinking here is that Republicans, fearful of losing seats in the House and Senate, will do everything in their power to juice the financial markets and calm fears about the U.S. economy.
CRYPTO: BTC
Key Data Points
That includes taking extraordinary steps to boost the price of Bitcoin, which is almost unanimously regarded as the key to reviving the fortunes of the crypto sector. The White House campaigned on a pro-crypto platform, and it's not going to abandon Bitcoin now. If Bitcoin continues to slide, the entire policy framework for making America a "Bitcoin superpower" will look increasingly out of touch with reality.
I'm not alone in this thinking. High-profile investor Cathie Wood of Ark Invest also thinks that Bitcoin and crypto will turn into a highly charged political issue the closer that we get to the midterm elections. She thinks the U.S. government will start active buying of Bitcoin for the Strategic Bitcoin Reserve, and that could be huge.
Remember, the original plan was to purchase 1 million BTC for the U.S. Treasury. That would give the U.S. control over 5% of the current circulating supply of Bitcoin, and ensure that it could help to shape the price of Bitcoin going forward. It might even lead to a crypto "arms race" between leading sovereign powers, as they race to accumulate Bitcoin. That would put even more upward pressure on the price of Bitcoin.
Will Bitcoin hit $150,000?
So just how likely is this scenario? Prediction markets currently give it roughly a 25% chance of happening this year. That's good enough for me. Any sign of active U.S. buying of Bitcoin is almost certain to end the current market malaise and push the world's top cryptocurrency to $150,000 this year.
