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Bitcoin is faced with short-term headwinds, but it there is huge potential for further growth in the second half of 2024, an industry expert said. QuoteInspector.com/flickr

KEY POINTS

  • The current 'weird dynamic' of the crypto market points to huge potential opportunity for long-term investors: Bitwise CIO
  • Changing attitudes in Washington and positive Bitcoin ETF flows are setting the right conditions for a $BTC surge
  • Layer 2 developments and stablecoin growth can then 'easily' drive the coin to $100,000

Bitcoin, which hit an all-time high of $73,000 before the halving in April, has plunged below $60,000 and has been struggling in recent weeks to hold the green line, but an industry analyst believes the world's top digital asset by market cap can still reach $100,000 in the second half of the year.

A 'dichotomy' in the crypto market

The cryptocurrency market has faced nothing but bad news in recent days, but many industry experts have been urging digital asset holders to look at the "long-term" potential. It's safe to say "the crypto market is facing a weird dynamic right now," Bitwise Asset Management CIO Matt Hougan wrote in a note Wednesday.

He said the current "dichotomy" within the market is paving the way for a huge potential opportunity for long-term investors in cryptocurrencies. "I have never seen a better long-term setup for crypto than right now," he said.

Long-term potential under changing tides in Washington

There is a shifting tone in Washington regarding the crypto industry, Hougan said. Aside from the passage of an increasingly bipartisan resolution that sought to establish a regulatory framework for crypto, the apparent reversal among Republicans is a major game-changer.

Earlier this week, the Republican Party released its 2024 Platform, which saw crypto topping two other innovation priorities that GOP candidates would like to prioritize in the lead-up to the November elections.

'Extraordinary' ETF inflows

The inflows into spot Bitcoin exchange-traded funds (ETFs) have been "extraordinary," Hougan wrote. He said that while the funds have already hauled in some $15 billion in net new assets since launching in January, he believes "they're just getting started." Once the ETFs are approved for mainstream use – for instance, Wells Fargo and Morgan Stanley – the market will likely see billions more in positive flows, he projected.

Pessimism across the market did have a negative impact on ETFs, as the funds bled millions in the past weeks before picking up earlier this week with positive flows. Instead of being affected by the German government's massive sell-off, U.S. Bitcoin ETFs bought the dip to bring in nearly $295 million on Monday.

The H2 future of Bitcoin

The world's first decentralized cryptocurrency has just started trekking the second half of 2024, and for Hougan, there's a lot of potential for the coin to surge and hit a new all-time high.

With apparent strong growth among stablecoins, big developments in layer 2 blockchain projects, and the deeper dive of prominent institutions such as BlackRock into the Bitcoin craze, the digital currency is set up for second-half success.

"The right mix of developments in the second half of the year could easily drive Bitcoin to $100,000 and push Ethereum to new all-time highs," Hougan said.

As of writing, Bitcoin was trading at $57,200, down from nearly hitting $60,000 on Thursday.

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