The token added as much as 2.5% on Sunday and was trading at about $29,700 as of 1:55 p.m. in New York. Smaller digital assets such as Ether, Binance Coin and Cardano also advanced.

In the past decade, four-month winning runs in Bitcoin foreshadowed an average surge of 260% over the subsequent year, data compiled by Bloomberg show. A jump of that magnitude would take the largest digital asset to a record $105,000 from the $30,000-zone where its 80% rebound in 2023 from last year’s punishing crypto rout has stalled somewhat. 

Bitcoin has changed narrative garb like a chameleon during the revival, drawing succor from bets on a Federal Reserve pivot to looser monetary policy, the perceived blow to fiat currency from the US banking crisis and a planned reduction in the supply of new tokens — a so-called halving — due next year.

“The biggest thing for crypto is that it’s a lightning rod for liquidity,” Christopher Forbes, head of CMC Invest Singapore, said on Bloomberg Television. “And as liquidity returns to the market, and it is and we’re seeing that, I think crypto will continue to trade well.”

In recent days, Standard Chartered Bank, BCA Research and Bloomberg Intelligence have all flagged possible paths to at least $100,000 for Bitcoin.

‘Scarce’ Asset

“The recent banking-sector crisis has helped to re-establish Bitcoin’s core use case as a decentralized, trustless and scarce digital asset,” Geoff Kendrick, head of crypto and EM FX West research at Standard Chartered, wrote in a note.

BCA’s Associate Vice President Juan Correa-Ossa said it’s possible for Bitcoin in the long-term to partially usurp gold as a store of value in a digitalizing world. If the token approached 25% of the market capitalization of the yellow metal, that would put Bitcoin’s price at $160,000, Correa-Ossa wrote in a note.

Bloomberg Intelligence’s Jamie Douglas Coutts said if 1% of global bond-market value moved toward Bitcoin, that would take the price to $185,000.

US Crackdown

None of the analysts are saying such trajectories are inevitable but the fact they are being evaluated shows the changed mood compared with 2022, when digital assets crashed and the FTX exchange headlined a spate of blowups.

Bitcoin and the wider crypto world remain exposed to a variety of risks, not least the crackdown on the sector in the US. A shorter term threat is if traders pare back expectations of friendlier Fed policy, according to BCA’s Correa-Ossa.

The various crosscurrents, amid a period of pronounced economic uncertainty, make the outlooks for real and virtual assets hard to parse. Bitcoin remains about $40,000 below its 2021 all-time high of almost $69,000.

“Crypto markets have cycles, too, only these in the past have been driven mainly by crypto-specific factors,” wrote Noelle Acheson, author of the “Crypto Is Macro Now” newsletter. “Not any more – now the crypto market has multiple drivers, making the narratives more complex while opening up the market to new investing cohorts.”

–With assistance from Sidhartha Shukla.