There's no denying it, the Bitcoin (CRYPTO: BTC) "flash crash" at the beginning of August was brutal for crypto traders. In a span of just 24 hours, Bitcoin lost 15% of its value. Some traders panicked, thinking that Bitcoin was headed below $50,000. Others surmised that the long-awaited Bitcoin rally might be over before it ever really started.

I still think that Bitcoin will hit $100,000 by the end of 2024. Yes, it means that Bitcoin will need to nearly double in price within a short time. And yes, I'm aware that geopolitical events in the Middle East could put a real kibosh on any interest in risk assets such as Bitcoin. But there's still a credible path to $100,000 for Bitcoin.

Bitcoin déjà vu

Don't forget about the Bitcoin halving, which took place on April 19. Historically, this event has meant big things for Bitcoin's price, which is why it attracted so much attention from investors just a few months ago. In three previous halving cycles, the price of Bitcoin absolutely skyrocketed. So many people expected the same thing to happen this year.

But what they didn't take into account is that it takes time for the Bitcoin halving to have an impact. That's because the halving changes the rate of new Bitcoin creation, and it takes time for the market to react to the changing supply growth. Think about the way monetary policy works -- it takes time for interest rate increases or cuts to have an impact on the broader economy.

If you look at a trading chart from the previous Bitcoin halving, which took place May 11, 2020, you can see exactly what I mean. On that day, Bitcoin's price stood at $8,618. The price meandered around the $10,000 mark for a few months, teasing investors with signs of a potential breakout. But it was not until the summer that the price of Bitcoin soared to the $12,000 level. And then, at the end of the summer, the bottom fell out of the market, and Bitcoin was trading back again around the $10,000 level.

Bitcoin / U.S. dollar chart by TradingView

But then, as we got deeper into the fall and approached the 2020 presidential election, the price of Bitcoin took off. Long story short, Bitcoin ended the year at $28,994, more than double the high reached during the summer. That included a rousing 48% gain in the month of December alone. And from there, Bitcoin was off to the races in 2021.

Sound familiar? As Yankees baseball great Yogi Berra would say, it's like déjà vu all over again. Bitcoin appears to be following the same pattern that it did four years ago. Of course, past performance is no guarantee of future performance. But remember that Bitcoin halving cycles have been highly predictive in the past, and that a compelling economic factor (the contraction in new Bitcoin supply growth due to the halving) could be responsible for this phenomenon.

Just how likely is $100,000?

Several clues can help determine how likely a price of $100,000 is for Bitcoin by the end of 2024. The trendiest option is to use a crypto prediction market such as Polymarket, where traders are placing real-world bets that various scenarios will come true. At the end of July (before the Bitcoin flash crash), traders suggested that Bitcoin had a 42% chance of hitting $100,000 by the end of 2024. Just a week later, that percentage had fallen to 20%.

Another option is to use, well, options. I'm talking about the Bitcoin options market. There, real-world traders are buying Bitcoin call options based on where they think the price of Bitcoin will be at various times. Right now, some of the most popular call options are those with a strike price of $100,000 and a late-December expiration. In other words, options traders still think there is a possibility of Bitcoin hitting a price of $100,000 within the next several months.

Right now, it's difficult to separate the signal from the noise in the cryptocurrency market. So if you are thinking about investing in Bitcoin, make sure you are taking a long-term perspective and not just reacting to every twist and turn of the market during an election year. Trust me, between now and Dec. 31, there are sure to be plenty of surprises, and you'll tie yourself into a pretzel trying to figure out what each one means for Bitcoin.

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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

Prediction: Bitcoin Will Hit $100,000 by the End of 2024 was originally published by The Motley Fool