In a recent interview macro trader and educator James Lavish outlines his view of what happens to Bitcoin’s price if there is a major event in the fiat markets.
The catalyst could be severe economic downturn or an unexpected event such as the failure of an insurance company and the resulting contagion.
If this happens Lavish predicts the Federal Reserve will respond as it always does by printing more money.
The inevitable result is inflation.
In this environment Bitcoin as a scarce uncorrelated asset is likely to see a significant increase in demand. Lavish predicts this could be $100,000 by the end of 2024.
The reason for this is that unlike the 2020 crisis Bitcoin is no longer dismissed by mainstream investors.
The advent of Bitcoin ETFs and futures has brought Bitcoin into the fiat investment infrastructure. At the same time institutional investors are looking to increase their Bitcoin allocation to 3% or more of their portfolio. The success of Michael Saylor’s Bitcoin strategy for MicroStrategy (MSTR) has other companies such as Jack Dorsey’s Square committing to hold Bitcoin as a treasury asset.
If the crisis is severe Lavish suggests Bitcoin’s price may initially fall amongst the general turmoil. He sees this as a buying opportunity in preparation for the predictable inflation-inducing response of the Federal Reserve. Combined with its increasing accessibility and acceptance Lavish suggests the continued destruction of the dollar can only take Bitcoin’s price to new heights.
Other initiatives such as the use of Bitcoin as collateral for a non-governmental private gold-pegged currency emphasize the bullish case for the coin.
