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Bitcoin has soared more than 74% to start 2023, but the world's most popular token by market cap could more than double by next year, according to Bob Ras, cofounder of blockchain firm Sologenic.

A key catalyst will be the halving process, which is when the reward for miners is cut in half. It's meant to cut the supply of tokens and historically has sparked price increases.

"When bitcoin's halving kicks in a year from now, we'll likely be well on our way past the previous all-time high," Ras told Insider.

That would mean bitcoin soars past the $67,000 level reached in November 2021, up from about $29,000 on Friday.

Meanwhile, bitcoin appears to be front-running the belief that looser policy from the Federal Reserve is on the way, Ras explained.

The Fed on Wednesday hiked rates for the 10th consecutive time, but Wall Street widely expects that to be the last increase of this tightening cycle.

He thinks the token's rally points to a future that is effectively a return to lower rates and more quantitative easing.

Technical indicators, such as long-term moving averages, suggest upside and momentum, he said, but it's the broader landscape that will determine its performance the rest of the year. And he wouldn't be surprised if bitcoin hits $40,000 by the end of 2023.

"Coupled with signs of slowing [economic] growth, the changing macro picture is pointing towards a Fed that will likely soon have to cut interest rates and inject a lot of liquidity into the market," Ras said. "If the Fed doesn't do this, then we could face a serious contraction, punctuated by a possible credit crunch. Either way, all roads appear to be leading to a loosening of monetary policy sooner rather than later."

Ras isn't alone in his bullishness. Standard Chartered published a recent note that said bitcoin could soar to $100,000by the middle of next year, and Matrixport predicted that bitcoin could more than double to about $65,000 by next April.

As the banking crisis that started with Silicon Valley Bank in March continues to spark contagion fears, more retail and institutional investors have been turning to bitcoin as a hedge, Ras said.

That turmoil re-emerged over the past week as regulators seized First Republic on Monday and sold the bulk of its assets to JPMorgan, triggered sell-offs at regional banks PacWest Bancorp and Western Alliance.

"The banking crisis helped to cement the narrative of bitcoin serving as a key store of value that lacks the sort of counterparty risk of holding funds by way of bank deposits," Ras said. "Bitcoin offers protection by way of decentralization, self-custody and a network that has never been hacked."

But a credit crisis poses the biggest downside risk for bitcoin, he said. In such a scenario, bitcoin as well as gold, another traditional safe-haven investment, could see a sharp decline in value.

"I'm not sure such a scenario would happen," Ras said, "but it's possible and would unleash a tremendous amount of volatility, not only for bitcoin but all markets."

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Bitcoin could more than double and hit a new record high next year - Markets Insider