Why Bitcoin Could Explode Beyond All-Time Highs In 2024
Bitcoin has been on a wild ride since the start of 2023, rising over 80% since January. Despite this, many experts believe that the current rally it might just be the beginning and that Bitcoin has the potential to surpass its previous highs.
Over the past five months, Bitcoin has surged from a significant low of $16,000 at the end of last year to trade as high as over $31,000 in the last 24 hours. While the asset may have shown quite an apparent recovery, research shows that BTC could post more profits in 2024.
Why Bitcoin Could See Massive Highs In 2024
However bitcoin has several notable factors influencing its rally. However, one of the crucial factors that could contribute to the massive asset growth in 2024 is the continued decline in the dominance of the US dollar and the crisis in the traditional banking sector.
Many people will look to an alternative store of value such as BTC as the US dollar loses dominance and the crisis intensifies. This happened last month, when major US banks such as Silvergate, Silicon Valley and Signature Bank were closed by federal authorities in the country.
This hugely impacted Bitcoin’s value in March as investors looked for another savings option, allowing BTC to push its price above $25,000 for the first time in several months. One more factor that could drive Bitcoin’s 2024 rally is the fact that there is a limited supply of the cryptocurrency.
Unlike traditional currencies, which central banks can print at will, Bitcoin’s supply is pegged at 21 million. As more people buy and hold Bitcoin, the available supply on exchanges decreases, which can lead to increased demand and higher prices.
The Bitcoin halving projected to take place in 2024 is known to boost this phenomenon. The halving is a pre-scheduled event every four years on the Bitcoin network, which reduces the reward received by miners for validating transactions in half. This means less BTC is created and sold on the market.
Bitcoin halving could impact its rally in 2024
The BTC halving is a highly anticipated event in the cryptocurrency community. Many are hoping this could be a good enough catalyst to take the asset past its $69,000 peak and propel the cryptocurrency market higher.
Historically, the Bitcoin halving has significantly impacted the price of Bitcoin. Big rallies followed the three previous halvings in 2012 and 2016 and 2020 in the price of Bitcoin.
The basic economic principle of supply and demand comes into play here. With reduced supply of new Bitcoin and assuming the demand for the cryptocurrency remains constant or increases, the price is bound to rise due to this scarcity.
This is because, as this event takes place in 2024, there will now be less Bitcoin available for purchase in the market, which makes each BTC more valuable.
According to Pantera Capitalthe next Bitcoin halving will occur on April 20, 2024. And although, on average, the market peaks 1.3 years after the halving, if history repeats itself, the next BTC halving could result in a BTC spike to $149,000 after the event.
However, it is important to note that the impact of the Bitcoin halving on the cryptocurrency price is not immediate. It may take several months or even years for the full effects to be felt in the market.
This is because the halving is priced – it is pre-programmed and known in advance by everyone on the Bitcoin network. Therefore, some investors can anticipate the halving and price it in the market well before it happens.
In addition, other factors can affect the price of Bitcoin, such as general market sentiment, geopolitical events and regulatory changes. These factors can often overshadow the short-term impact of the halving.
Regardless of the news circulating the industry, BTC and the rest of the crypto market have been bullish for the past few weeks. However, in the last 24 hours, BTC has seen a slight 0.6% retracement with a trading price of $30,266 at the time of writing.
iStock Featured Image, TradingView chart.