British cryptographer and Blockstream CEO Adam Back has placed a significant bet on Bitcoin. Back, also known for inventing Hashcash, has wagered $1 million on Bitcoin, breaking the $100,000 price point before its next halving, scheduled for March 2024. In a recent interview with Robert Breedlove, he discussed the reasons behind this bet and the factors affecting Bitcoin’s price trajectory.

The bet, initiated on Twitter, emerged during a discussion about the direction of Bitcoin’s price. Back noted that several external factors, including the impact of the COVID-19 pandemic, supply chain disruptions, the Ukraine conflict, and DeFi and altcoin challenges, have influenced Bitcoin’s price. He argued that these factors, often sensationalized by mainstream media, have hindered Bitcoin’s expected growth.

Back said that Bitcoin’s current price is below historical comparisons between halving cycles, attributing this deviation to external factors. Given its fundamentals, he expressed the belief that Bitcoin should be trading at a higher level. He pointed out that many investors expect a price increase post-halving, traditionally occurring six to nine months later. However, Back contended that Bitcoin should have already exceeded $100,000.

He said, “Bitcoin, you know before 2021 and had never gone below the 200-week moving average, and during the COVID-19 periods, the price went below there, which is kind of, you know, news, and it’s even slightly below it now.  I’d say that we’re out of a normal range due to, you know, gross compounding bunch of factors affecting price.”

The bet materialized when someone on Twitter suggested a bet on Bitcoin’s price. Back accepted the challenge, and the terms were set for Bitcoin to reach $100,000 by the halving or the end of March 2024, whichever comes first.

He also highlighted that Bitcoin miners, especially during bull markets, tend to hold onto their coins rather than sell to cover operating costs. This behavior, combined with external factors, can reduce available supply and further drive up Bitcoin’s price.