With Bitcoin‘s (BTC -0.02%) price hovering near its all-time highs and almost tocuching the $112,000 level, there are a few scenarios for what the king of cryptocurrencies might do next.

Let’s explore three, starting with the bull thesis for why the coin is likely to go higher.

The bull thesis is playing out already

The most obvious possibility for Bitcoin over the coming days, months, and even years is for it to continue gaining in value.

This process is supported by a powerful mixture of different forces at the moment, including but not limited to:

• Adoption among institutional investors (banks, pension funds, etc.).
• Adoption by governments via the formation of strategic reserves or repositories.
• Adoption by major corporations seeking to get exposure.
• The genesis of Bitcoin treasury companies that aspire only to acquire and hold it.
• Rising global liquidity, enabling capital flows into assets that are perceived as being riskier, like cryptocurrencies.
• The widespread threat of inflation, encouraging capital to flow into assets that can’t be debased.

The foundation for each of those very formidable trends is also the one factor that’s responsible for making Bitcoin a valuable asset in the first place.

There can only ever be 21 million Bitcoin in circulation. It only gets harder to mine as time goes by. As more buyers look to secure some coins for themselves, they are forced to compete more intensely over a pie that keeps getting smaller, and that creates a structural impulse for prices to continue rising.

Image source: Getty Images.

The widespread and simultaneous recognition of all of the above facts is pushing sentiment about the coin to an extreme. It may soon even border on a fit of genuine speculative euphoria. If that happens, the $112,000 level might look like a small blip on the chart within the next few years — assuming there isn’t anything to rain on the parade.

The bear thesis isn’t wrong

The bear case for Bitcoin is not in denial of any of the bullish factors or trends.

Instead, it’s a grounded perspective which points out that Bitcoin is not actually an asset that’s totally independent of the traditional financial markets, and that those traditional markets are more likely to be in trouble than they are to charge higher.

Take a look at this chart:

SPY Total Return Price data by YCharts.

As you can see, on average, Bitcoin’s price has a fairly strong correlation with the stock market, though there are periods when the two decouple.

In the bear scenario, there are plenty of reasons to be pessimistic about stocks, including:

• The Trump administration’s declaration of a global trade war and its inconsistent tariff policies.
• Historically high valuations.
• Stagflationary economic data in recent quarters.

And that’s before even getting into Bitcoin-specific issues, like its volatility, which undermines popular narratives about its new status as digital gold.

Overall, the bears are correct that the global macro landscape is very uncertain right now. Still, it’s important to recognize that uncertainty is not the same as realized downside risk, even if it feels similarly bad to experience.

The most likely outcome is for the price to go higher

The trouble with the bear scenario is that its outlook is inherently shortsighted in terms of its objections to the bull thesis for Bitcoin.

Trade wars and economic problems eventually end, and uncertainty tends to ultimately give way to more stable arrangements even if they result in a macro situation that’s less favorable than before. High valuations in the stock market could become rectified by stocks falling (potentially dragging Bitcoin down too), or they could become rectified by companies reporting growth that justifies their pricing. The coin’s price can fall a lot, but it probably won’t stay down forever.

During the time it takes for those issues to wrap themselves up, Bitcoin’s circulating supply will still be getting smaller and smaller. The asset might be correlated with the stock market, but it isn’t a company, and its protocol defines its own set of rules that have an independent impact on its price. Therefore, it is not likely that the bears will be permanently correct about the future of Bitcoin; even if they’re right and the price goes down from here, it will likely only do that for a while before its hard-coded supply factors kick in and stop the bleeding.

So the base case for Bitcoin is that it will go higher. If that doesn’t happen in the next few months, it will happen eventually. You don’t need to bet on this coin going to the moon to capture some of the upside. All you need is patience and to steadily buy it via dollar-cost averaging.