This Bitcoin Price Rally Has Little to Do With Bitcoin, Again

In other words, bitcoin has once again been at the right place at the right time. Being at the right place means that BTC still lives rent-free in the minds of many, but not too many, retail and institutional investors, as a multi-purpose scarce asset. It can be “digital gold,” a currency debasement hedge, a portfolio diversifier, and simply a speculative asset.

Or a “tech stock” that was considered very cheap after it crashed by more than 50% from its all-time high. When the macro and other kinds of stars have aligned, these narratives have once again become a magnet that pulled investors back to bitcoin.

Combined with low liquidity in the market and record-high liquidations of short BTC positions, we got an explosive mix that propelled the bitcoin price by more than 20% in a week.

Why Is Bitcoin Price Going Up?

Here is a summary of the top-cited, often intertwined reasons for this rally, besides the derivatives-specific boost:

• U.S. Treasury buybacks
• USD weakness, falling Treasury yields as the macro tailwind
• Cooler inflation data reducing rate-hike fears
• Optimism regarding the Clarity Act
• The debasement trade and the digital gold narratives are back
• ETF flows returned with a multibillion-dollar bang
• The “institutional demand is back” thesis is gaining traction
• AI-driven earnings boom
• “The bottom is in” and the bitcoin four-year cycle argument
• Forecasts of further upside into year-end once again moved towards $100,000

In short, nothing about Bitcoin, the network, and bitcoin, the asset, related news. The market ignored the Coldcard crisis, which showed serious risks to the Bitcoin infrastructure and the strength of how they’re being solved, not to speak of the BIP-100 drama, new Bitcoin products, including those shipped by Lightning Labs, that could help BTC payment adoption. The drop in the Bitcoin hashrate, or the computational power of the network, has also seemingly not had much of an effect on the price, as well as the fact that there are still many questions about Bitcoin’s quantum resistance lingering.

Gambling, not Investing

This is not surprising, given what recent research by the Federal Reserve Bank of Cleveland showed — investments in bitcoin and the broader crypto asset market are largely considered gambling.

Therefore, BTC remains highly sensitive to all these external things, including expectations around real yields and global liquidity. At the same time, one can never know how sticky the debasement trade and digital gold narratives will be this time, as they’ve already been dismissed in the past.

In other words, at least in the short, medium, or even longer term, Fed governors will still have more influence over the price of BTC than the actual Bitcoin builders and companies. Hence, a more dovish Fed into the autumn would help with another leg up, while a renewed inflation shock could do the opposite, and “no one” would possibly care if someone came up with a revolutionary new, super-safe and simple bitcoin self-custody solution.

What Will the Price of BTC be by the End of 2026?

In this context, what are the most popular explanations and expectations of what might happen with the bitcoin price later this year? As analysts are way more successful in explaining the past than forecasting the future, the estimates are still all over the place, but have started leaning more bullish.

$100,000 is now increasingly being seen as a more possible target this year, with some even forecasting $150,000 or more, while some analysts still expect a final flush towards $50,000 before the real rally towards a new all-time high resumes.

From the usual suspects that will determine the price of BTC later this year, these are considered to be the most important ones:

• Bitcoin ETF flows
• The market’s expectations about Fed decisions and the actual decisions
• Treasury buybacks
• The fate of the Clarity Act
• USD direction and long-end yields
• U.S. midterms in November
• BTC treasury companies — Strategy promised to return to buying bitcoin this year
• Games in the derivatives markets

Other things such as investor sentiment, traditional markets, AI stocks, especially, the strength of current bitcoin narratives or the emergence of new ones, alongside some unpredictable developments, might also have a say in what price BTC will end this year at.

To conclude, while we can’t be sure what the price of bitcoin will be by the end of this year, we almost certainly can be sure it won’t be affected by developments with Bitcoin itself. (But don’t forget to always brace for something unexpected.)

At the time of writing, BTC is changing hands at around $79,000 and is up 24% in a week, after testing $81,000 during Asian trading hours today. The price is still down 29% in a year and 37% from its all-time high.