According to Matthew Sigel, director of digital asset research at VanEck, bitcoin could surge to $180,000 in 2025 if key cycle indicators remain muted. I’m talking to podcast host Natalie Brunell, Sigel outlined a clear four-year pattern in Bitcoin’s price action that he believes continues through multiple market cycles.

Why $180,000 for Bitcoin seems likely

Sigel explained that Bitcoin tends to outperform almost every other asset class for three years of each four-year halving cycle, before undergoing a deep correction in the fourth year. Referring to payouts typically ranging from 60% to 80%, Sigel said this decline often occurs roughly two years after a BTC halving.

Since Bitcoin’s last halving occurred in April 2024, Sigel sees 2024 and 2025 as potentially sturdy years. “This year of decline usually occurs in the second year after the halving,” Sigel explained. “Bitcoin halfving took place in April this year. So 2024 [will be a] sturdy year, 2025 should be a sturdy year. I think that 2026, unless something changes, will be a year of decline.

Based on historical data, he recalled the smallest bottom-to-peak appreciation for Bitcoin in previous cycles, which was around 2,000%. Even if that number halves to 1,000%, Sigel pointed out that Bitcoin could rise from a low of around $18,000 to as high as $180,000 in the current cycle. “So I see it going up to $180,000 this cycle and I think that will probably happen next year,” Sigel added.

He also stressed that Bitcoin’s volatility means the price could go above or below that number, but $180,000 is a likely 2024 target if the pattern holds and no major red lithe indicators emerge.

Sigel broke down what he considers the most vital signals investors should watch. The first concerns derivative funding rates: If the annual cost of holding bullish Bitcoin positions in leveraged markets exceeds 10% for more than a few months, Sigel considers it a warning sign.

“Some of these metrics include funding rates. When Bitcoin’s funding rate exceeds 10% for more than a few months, a red lithe usually turns on,” Sigel warned, explaining that recent market activity is resetting elevated funding rates: “[Last week’s] washout eliminated this as well. So financing rates [are] it doesn’t actually flash red.

The second is the level of unrealized profits on the blockchain, where on-chain analysis can reveal whether market participants’ cost basis is so low that realizing significant profits could soon trigger selling pressure. “We don’t see horrendous amounts of unrealized profits [yet]– Sigel noted.

Finally, he said anecdotal evidence of widespread retail leverage or speculation could also raise warning lights. He explained that if all of these risk indicators were to equalize at a certain price range – for example, if Bitcoin reached $150,000 and these indicators were pointing to a market high – he would be cautious. However, he said if the price reaches around $180,000 without these signals emerging, there could still be room for further appreciation.

“If we reach 180,000 dollars and none of these lights are flashing, maybe we’ll let it run. If all these lights flash and the price is 150,000. dollars, I won’t wait,” Sigel added.

Next BTC cycle predictions

He also examined Bitcoin’s long-term growth potential by comparing it to gold’s market capitalization. Since about half of gold resources are used for industrial and jewelry purposes, he concluded that the other half could be more directly compared to Bitcoin’s function as an investment and store of value.

Sigel believes that if Bitcoin achieved a valuation comparable to half the market cap of gold, the price could trend towards around $450,000 per coin over the next cycle.

Taking an even more forward-looking view, he described VanEck’s long-term model, in which global central banks could eventually hold Bitcoin as part of their reserves, even if it is only at a 2% weighting. Since gold makes up about 18% of central bank reserves around the world, Sigel assumes that Bitcoin’s share would be much smaller in comparison.

He also factored in the prospect that Bitcoin could one day serve as a settlement currency for global trade, potentially among emerging economic alliances such as the BRICS countries (Brazil, Russia, India, China and South Africa), which could push its valuation significantly higher. According to VanEck’s calculations, this scenario could push Bitcoin to a price of $3 million per coin by 2050:

“We also assume that Bitcoin is used as a settlement currency for global trade, most likely among the BRICS countries. By 2050, we will have three million dollars per coin, which would be about 16% compound annual growth rate.”

At the time of publication, the BTC price was $107,219.

Featured image from YouTube / Natalie Brunell, chart from TradingView.com