2 Scenarios That Could Send Bitcoin to $150,000, or Crash It Back to $45,000

Key Points

• Bitcoin smashing past its all-time highs is likely, but not guaranteed.

• If a set of interlocking bearish catalysts occur, the coin's price will fall sharply.

• Trade policy and inflation are the two big things that could rain on the parade.

• 10 stocks we like better than Bitcoin ›

Trying to forecast Bitcoin's (CRYPTO: BTC) next big move is often easier than it seems, as long as you're willing to entertain multiple possibilities. Today, as always, the coin's balance depends on forces far bigger than crypto itself.

At one end is a flood of global liquidity and ravenous demand from institutional investors. On the other is an inflationary flare-up that could wreck risk appetite and expose a fragile new crop of highly leveraged "Bitcoin treasury" companies. Investors need to understand both possibilities before deciding whether to buy more, trim, or simply hang on.

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Global liquidity could fire a run to $150,000

Central banks have already started cutting the prime interest rate at which they lend to their national banks. In doing so, they reduce the cost of borrowing money, which has the effect of encouraging capital to chase riskier investments as safer yields from government bonds become lower.

In this vein, the European Central Bank (ECB) delivered its second reduction of its interest rate in early June and signaled at least one more cut before year-end. The Federal Reserve in the U.S. has been flirting with rate cuts of its own and now faces pressure from the president to do so. Thus, further reductions to the interest rate are likely inevitable, though not necessarily happening this month or next.

That incoming monetary swell is meeting a brand-new demand pipe in the form of exchange-traded funds (ETFs) that hold Bitcoin. Those products soaked up another $1 billion of inflows in the week ending July 7, capping 12 straight weeks of inflows. Bitcoin used to rely on retail investor fervor to drive its price higher, but now it enjoys institutional autopilot bids every time brokers rebalance.

Meanwhile, its supply growth is running on fumes, and it'll only get worse over time.

Since the April 2024 halving, miners have been creating just 450 new coins per day, down from 900 before -- and more than they'll ever create in the future once the next halving kicks in sometime in early 2028. With 93% of all coins already mined, the float keeps shrinking even as ETF issuers, corporates, and long-term holders squirrel more away.

Put liquidity, ETF flows, and hard-coded scarcity together, and the math gets euphoric for holders. From today's roughly $109,000 price, only a 37% climb is needed to clear $150,000.

If interest rate cuts accelerate and fund inflows stay anywhere near current run rates, that threshold could arrive faster than most expect.

Stagflation could knock this asset back to $45,000 or even lower

There's a darker path here, and it behooves investors to understand how it could play out because it could be quite grim, at least temporarily.

President Trump's July tariff schedule threatens levies as high as 25% to 70% on major trading partners, a move economists warn could reignite inflation just as headline prices were cooling. If inflation stays sticky as a result of these tariffs, the Federal Reserve may kill or put off its own rate-cut plans, bond yields could stretch back toward 5%, and the dollar would strengthen. Sharp moves in yields historically sap appetite for risk assets, including Bitcoin, and a stronger dollar has historically not been favorable for the asset either.

There's another pair of risks here. In theory, the coin is an inflation hedge, yet it has stumbled during previous yield spikes when liquidity dried up and margin calls snowballed.

A fresh stress point has emerged as dozens of newly listed Bitcoin treasury companies that borrow in dollars to buy coins.

Their convertible bond capital structures work only if Bitcoin keeps climbing. A sharp drop could force emergency sales and hands upside to creditors. Many of the 50-plus Bitcoin treasury newcomers of 2025 could thus implode in the next downturn.

If a leveraged unwind coincides with tighter monetary policy, Bitcoin's price could cascade to the mid-$40,000s, a roughly 59% drop from today.

Which outcome is more likely?

Thankfully for holders, the balance of evidence still tilts firmly toward a very bullish picture for Bitcoin here.

Central banks outside the U.S. are already easing, global liquidity is edging higher, and ETF demand shows no sign of fatigue. Buy this coin, and hold it for the foreseeable future and beyond.

When you do, just remember that volatility is the toll you pay for Bitcoin's long-run scarcity story. If you can stomach a potential detour to $45,000, the road to $150,000 or beyond will look surprisingly well-paved.

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Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.