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After a spectacular August rally that saw it soar 25% in a single month, there's newfound optimism among many crypto investors that Bitcoin (CRYPTO: BTC) could reclaim the $100,000 price level by the end of the year.
But just how likely is that? As it turns out, one key factor could determine where Bitcoin heads next.
Let's be clear from the outset: The odds are not in Bitcoin's favor right now. Even at its current price of $76,500, Bitcoin faces a steep uphill battle to get to $100,000 in 2026.
On the Kalshi prediction market, for example, traders give Bitcoin a 4% chance of hitting $100,000 by November, an 11% chance by December, and a 16% chance by January 2027.
Different people have different ideas about the catalyst that could ignite a Bitcoin bull market rally in the final months of the year.
Until recently, one possibility was the anticipated passage of the Digital Asset Market Clarity Act ("Clarity Act"). But on Sept. 15, the Senate failed to push forward the Clarity Act, and the chances are low that it will pass anytime soon. This important piece of crypto legislation was supposed to speed up the rate of institutional adoption of Bitcoin and unlock any capital waiting on the sidelines to be deployed into crypto.
For others, the primary catalyst for Bitcoin is the reemergence of the "digital gold" investment thesis. Long story short, Bitcoin has the potential to be a long-term store of value and hedge against inflation, just like physical gold.
However, I'm on the side of billionaire investor Ray Dalio here: If forced to pick between physical gold and Bitcoin, most investors will pick physical gold. That limits the upside potential for Bitcoin from the gold narrative.
But there's one more factor that might lead to a stunning rally over the final quarter of the year: the Bitcoin halving.
Historically, Bitcoin has been a boom-or-bust asset, with three good years followed by one terrible year. This four-year cycle might sound arbitrary, but it's actually based on the fact that a Bitcoin halving occurs every four years. There was one in 2024, and there will be one in 2028.
So where are we now in this cycle? Bitcoin hit its all-time high of $126,000 last October. The time between the October high and the start of the August rally is approximately 10 months. This is the terrible year longtime Bitcoin investors have learned to accept.
Some say that suggests that Bitcoin may have already bottomed. That's the viewpoint of Coinbase Global (NASDAQ: COIN) CEO Brian Armstrong, who thinks Bitcoin will see a robust recovery into April 2028, when the next halving is scheduled to take place.
If the bottom is in, then Bitcoin could be well on its way to reclaiming the $100,000 price level in the near future. October and November have always been two of its best months of the year, and that gives me confidence that Bitcoin will soon be headed higher.
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