Things look a bit grim for Bitcoin (BTC 0.38%) right now. It's down 42% from its all-time high of $126,000 from a few months ago and trades for just $72,000.
No wonder prediction market traders on Polymarket are only giving Bitcoin a 1% chance of hitting the $150,000 price level by the end of March. After all, it's almost inconceivable that Bitcoin could rally by a head-spinning 108% in the course of just 30 days.
But those 1% odds might be telling a very different story about Bitcoin than people think. Here's why.
Bitcoin's volatility
Many investors continue to underestimate Bitcoin's volatility. Even in years when Bitcoin has had monster rallies, it has also had its share of peaks and valleys. The price of Bitcoin does not go straight up, even in good years.
The long-term trajectory, of course, is straight up. But along the way, there are plenty of panics, sell-offs, and flash crashes.
Here's a Bitcoin chart for 2020, when it rallied in price by an incredible 304%. Bitcoin literally quadrupled in price that year, but there were plenty of head-fakes, abrupt turns, and fake-outs for the first nine months. It was only in October that Bitcoin really turned on the afterburners.
Bitcoin / U.S. dollar chart by TradingView
And, if you study the historical data for Bitcoin, one fact becomes readily apparent: Bitcoin can turn on a dime. It can be down 40% one quarter and then rebound by 25% in the next quarter, as it did in 2021. There is no such thing as a gradual recovery with Bitcoin.
CRYPTO: BTC
Key Data Points
In short, Bitcoin is more volatile than any typical stock. It may not really matter what Bitcoin does in one quarter, because it can abruptly reverse course in the next quarter. That's why Bitcoin's poor first-quarter performance in 2026 might matter less than you think.
Image source: Getty Images.
Binary "yes/no" outcomes
According to new research from Galaxy Digital, prediction markets tend to overstate consensus. This is due to their emphasis on binary "yes/no" outcomes.
That's what sometimes trips up prediction market traders. They see a 1% chance of an event occurring in the future and immediately assume there's massive consensus among traders. Right now, it seems like the entire crypto universe is against Bitcoin.
However, there's a big difference between thinking that Bitcoin might hit a certain price and being absolutely, 100% convinced. Those on the fence about Bitcoin might change their opinions overnight. Once they do, the probabilities might shift markedly.
What were the odds of Bitcoin hitting $100,000?
I'm taking that 1% probability of Bitcoin hitting $150,000 by the end of March with a grain of salt. That's because I'm not focused on Bitcoin's price on a quarter-over-quarter or even an annual basis. I'm looking at Bitcoin's price over the long haul.
With that in mind, Bitcoin is a cryptocurrency that has seen exponential price growth over an incredibly short period of time. Thirteen years ago, I'm sure that anyone trying to predict the future price of Bitcoin when it was trading for under $100 could never have predicted a day when Bitcoin traded for upwards of $100,000. After all, 1000x returns in the span of just over a decade would have been just too improbable, right?
