1 Cryptocurrency Up 29% in 3 Weeks to Buy Before It Soars Another 515% by 2029

Most investors know the cryptocurrency market can move quickly. A 5% or 10% move in a token's price in a few hours isn't uncommon. So, Bitcoin's (CRYPTO: BTC) 29% rise in just a few weeks, including a 21% climb in three days between Aug. 19 and Aug. 22, isn't too out of the ordinary. The leading cryptocurrency trades nearly 41% above its July low as of this writing.

The current momentum in Bitcoin is driven by a couple of key factors that could push its price significantly higher from here. In fact, one analyst thinks the cryptocurrency could reach $500,000 by 2029, representing upside of more than 500% from here.

Here's what investors need to know.

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A 40-year trend is ending, and Bitcoin will benefit

Bitcoin is often called digital gold. Its limited supply and status as a store of value independent from any central bank make it very gold-like. However, it doesn't always trade like gold, which is much less volatile than Bitcoin.

However, Bitcoin has seen its price behave very much like gold during two important occasions in the recent past, as pointed out by Bitwise's head of research André Dragosch in a recent memo. First, Bitcoin moved in line with gold during the 2020 COVID-19 crisis amid multiple rounds of fiscal and monetary stimulus from the Fed and U.S. government. More recently, the two have moved in line with one another as Secretary of the Treasury Scott Bessent signaled the Treasury's plans to increase buybacks of long-term bonds.

Bessent's intervention is a move to tamp down long-term interest rates, which have climbed to their highest level in 19 years. A team of analysts at Bernstein doesn't think interest rates will come down anytime soon, regardless of government intervention. The analysts note that interventions like Bessent's treat the symptom rather than the problem: ongoing government deficits.

The 40-year trend in lower interest rates may be over. With higher interest rates in place, stores of value like Bitcoin may become more expensive.

Importantly, higher long-term interest rates are a challenge worldwide. The United Kingdom, France, Germany, Australia, and Japan are also seeing long-term government bond rates rise. As government debt rises and interest rates compound the challenge, there's a growing likelihood that global currencies will decline in value. As a result, hard assets like gold or Bitcoin will see their prices rise, even if their "value" stays the same.

New regulations could give Bitcoin a boost

There's a growing effort by the U.S. government to regulate cryptocurrencies. The Genius Act, enacted a year ago, established clear rules for how stablecoins are formed and the treasury requirements for maintaining them. The Clarity Act is currently in Congress and would formally classify Bitcoin as a commodity, which falls under the Commodity Futures Trading Commission's (CFTC) jurisdiction.

Unfortunately, the Clarity Act is unlikely to pass without some changes. Lawmakers cite conflicts of interest with President Donald Trump's cryptocurrency holdings and meme coin business. However, it's very likely that additional regulatory clarity will come in the next few years. That will pave the way for broader institutional adoption.

That's important because institutional investors looking to hedge against rising government debt and higher interest rates are a much larger force than the current capital held in Bitcoin. For reference, there's currently $31.2 trillion held in gold. Bitcoin's market cap of $1.6 trillion, and the broader $2.7 trillion market cap of all cryptocurrencies, are relative drops in the bucket.

How much higher can Bitcoin climb?

The analysts at Bernstein believe currency debasement could push the price of Bitcoin substantially higher over the next few years. They see it reaching a new all-time high by next year, topping $150,000 by mid-2027.

The analysts expect Bitcoin to maintain its historical four-year cycle, which could push the price to $300,000 by the end of 2029 in their base case. In their bull case, however, the price could climb to $500,000, aided by positive regulatory developments and macroeconomic tailwinds.

The analysts expect another four-year cycle to follow after prices peak in 2029. The old highs could become the new lows, just as we saw earlier this year when Bitcoin found a floor around $60,000. That means right now could be an excellent opportunity to buy into Bitcoin's momentum, as fundamental drivers can push the price higher.

Adam Levy has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.