Bitcoin Gears Up for Major Transformation with OP_CAT Upgrade

The upgrade will introduce some advanced functionalities like covenants and zero-knowledge rollups, that will revolutionize Bitcoin’s capabilities as a payment and DeFi network. Experts also predict price growth for Bitcoin, especially after the election of Donald Trump. Some market analysts believe that Bitcoin could reach $100,000 by Trump’s inauguration, which will mostly be driven by institutional interest and Bitcoin ETFs. Meanwhile, Mike Novogratz is still sceptical about a U.S. Bitcoin reserve under Trump.

Game-Changing OP_CAT Upgrade for Bitcoin

StarkWare CEO Eli Ben Sasson shared that OP_CAT, which is a major upgrade to the Bitcoin network, is expected to launch within the next year. At Devcon 2024 in Thailand, Ben-Sasson explained that OP_CAT will introduce a whole range of functionalities to Bitcoin, like covenants, zero-knowledge (ZK) rollups, and new layer-2 (L2) network capabilities. Starknet, StarkWare’s scaling solution, is set to become the first L2 network to settle directly on both Bitcoin and Ethereum.

Although OP_CAT is a rather sophisticated addition to Bitcoin’s network, Ben-Sasson describes its core as remarkably straightforward. By using an analogy, he compared Bitcoin to an old scientific calculator that is equipped with a limited set of functions compared to a modern smartphone. In this context, OP_CAT adds a new “button” to the calculator, which makes it possible to concatenate, or join together, two strings of characters. With this capability, the “Bitcoin calculator” could perform some very advanced functions like inspecting files, running programs, and managing more extensive data operations.

The idea of OP_CAT, or “operation code concatenate,” is rooted in Bitcoin’s early development, where Satoshi Nakamoto first implemented the opcode but later removed it in 2010 because of security concerns. The opcode was shelved to keep Bitcoin’s structure robust and relatively simple. However, cryptographer Ethan Heilman and Botanix Labs lead engineer Armin Sabouri reintroduced the OP_CAT proposal in October of 2023, and suggested that the opcode could be safely revived through a soft fork.

According to Ben-Sasson, OP_CAT still aligns with Bitcoin’s foundational mission, but offers a chance to make it a more practical payment network. He pointed out that Bitcoin’s high transaction fees currently hinder its use for everyday purchases, like buying a cup of coffee. With the introduction of OP_CAT, these fees could become much more manageable, and could allow Bitcoin to fulfill its intended role as an accessible payment solution.

Some experts even suggested that OP_CAT could allow Bitcoin to surpass Ethereum in decentralized finance (DeFi) activity and transaction volume over time. However, as the popularity of Bitcoin “sidechains” grows, some questions have popped up around their security and effectiveness as true L2 networks. 

Many sidechains don’t settle directly on the Bitcoin blockchain, and rely instead on mechanisms like two-way pegs or bridging systems like the Stacks proof-of-transfer model. Web3 development firm Labrys’ founder Lachlan Feeney pointed out that while sidechains offer utility, they don’t deliver the conservative, high-security assurances that traditional Bitcoin users demand to justify using their assets on these platforms.

Bitcoin to Hit $100K by Trump’s Inauguration?

People in the crypto space are not only excited about future Bitcoin upgrades, but about its price trajectory as well. The recent U.S. presidential election, where former president Donald Trump emerged victorious, is expected to set the stage for Bitcoin’s rise to $100,000, driven by pro-crypto regulatory changes. 

Fadi Aboualfa, head of research at Copper.co, shared in an interview that Bitcoin could hit the $100,000 mark by the presidential inauguration on Jan. 20 of next year. He pointed out that while a strong dollar usually signals challenges for crypto, the election outcome brought near-term stability, which benefitted markets. This very optimistic price projection is backed by rising institutional interest, particularly through Bitcoin exchange-traded funds (ETFs).

Copper.co’s analysis also indicates that Bitcoin ETFs could be pivotal in Bitcoin’s price growth towards $100K. This forecast aligns with Trump’s promises to address the “excessive US dollar strength” while still maintaining its global reserve status.

Aboualfa also expects some regulatory shifts post-election, and an increase in crypto-friendly figures across government roles. He expects these changes to encourage more flexibility and clarity around launching, listing, or trading digital assets, while certain regulations will remain, like those for tokens resembling securities.

Popular crypto trader and investor Michael Van de Poppe also shared his thoughts recently, and predicted that Bitcoin’s growth could follow a prolonged cycle that could possibly stretch into 2026. He described this as the “perfect storm” for crypto, although he did warn that soaring debt levels could lead to a crisis similar to that of 2008. Van de Poppe believes that while Bitcoin could ultimately reach $1 million, this ascent could coincide with a broader financial crisis.

U.S. Bitcoin Reserve Unlikely

Mike Novogratz, the founder of the crypto investment firm Galaxy Digital, recently shared his thoughts on the possibility of the United States establishing a Bitcoin strategic reserve under President-Elect Trump. He stated that he believes there is a “low probability” of this actually happening. 

In an interview with Bloomberg TV, Novogratz explained that he expects government branches will clash over such a proposal, which will complicate its path forward. He also argued that the U.S. dollar does not require support from Bitcoin or any other asset to maintain its status as the world’s reserve currency.

Michael Novogratz Bloomberg interview (Source: Bloomberg)

While Novogratz is doubtful that a Bitcoin reserve will be formed, he stated that if the U.S. were to establish one, it could drive Bitcoin’s value to $500,000. This will spark what he termed a “sovereign HODL race” among nations. He believes a move like this will compel other countries to buy Bitcoin, which will add even more momentum to the emerging trend of national Bitcoin acquisition.

El Salvador and Bhutan are some great examples of countries already investing heavily in Bitcoin. El Salvador was the first nation to adopt Bitcoin as legal tender in 2021 under President Nayib Bukele, and has continued to add to its reserves. Bhutan also quietly gathered an impressive Bitcoin reserve. Arkham Intelligence even revealed in September 2024 that the Kingdom holds about $780 million in digital assets. Both countries have seen their holdings increase quite a bit. El Salvador reported nine-digit gains and Bhutan’s crypto assets are now worth over  $1 billion.

Fed President Softens Stance on Bitcoin

Minneapolis Federal Reserve President Neel Kashkari, who is a long-time critic of Bitcoin and other cryptocurrencies, recently shared that he might be open to reconsidering his stance. Speaking with CoinDesk in New York City, Kashkari indicated that he is willing to “have an open mind,” though he is still not sure about the actual purpose of cryptocurrencies. 

He believes they lack practical utility beyond speculation. Kashkari also pointed out that despite over a decade of existence, the crypto industry has not yet achieved widespread adoption or established a clear role in the real economy.

Cryptocurrencies have struggled to integrate with the U.S. financial system, mainly due to regulatory resistance. The Federal Reserve plays a key role in the oversight of traditional finance, and has been very cautious in its approach to crypto. 

On the other hand, with Donald Trump’s recent election victory, the regulatory landscape may shift. Trump very openly shared his support for the crypto industry and even promised to replace Securities and Exchange Commission (SEC) Chair Gary Gensler, who has been viewed as a barrier to crypto’s growth in the U.S.

Some of Trump’s supporters, including Elon Musk, reportedly advocated for weakening the Federal Reserve, which could affect people like Kashkari. Trump also previously tried to remove current Fed Chair Jerome Powell in 2018, which rattled the stock market. However, Powell recently confirmed he has no plans of resigning under the new administration.