Why Bitcoin Could Explode Past 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 today’s rally may be just the beginning and that Bitcoin has the potential to surpass its previous highs.
Over the past five months, Bitcoin has risen from a significant low of $16,000 late last year to trade as high as over $31,000 the last 24 hours. Although the asset may have shown a fairly obvious recovery, research shows that BTC may record more gains in 2024.
Why Bitcoin Could Record Massive Highs in 2024
Although Bitcoin has several notable factors affecting the rally. However, one of the decisive factors that could contribute to the asset’s massive growth in 2024 is the continuous decline of US dollar dominance and the crisis in the traditional banking sector.
Many people will seek 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 shut down by federal authorities in the country.
This massively impacted Bitcoin’s value in March as investors sought another option for savings, allowing BTC to push its price above $25,000 for the first time in months. Another factor that could drive the Bitcoin rally higher in 2024 is the fact that there is a limited supply of cryptocurrency.
Unlike traditional currencies, which central banks can print at will, the supply of Bitcoin is fixed at 21 million. As more people buy and hold Bitcoin, the available supply on exchanges decreases, which can lead to an increase in demand and higher prices.
The Bitcoin halving scheduled to take place in 2024 is known to drive this phenomenon. The halving is a pre-programmed event every four years in the Bitcoin network, reducing reward received by miners for validating transactions in half. This means that less BTC is created and sold on the market.
Could the Bitcoin Halving Affect the 2024 Rally?
The BTC halving is a highly anticipated event in the crypto community. Many hope this could be a good enough catalyst to propel the asset beyond the $69,000 peak and push the crypto market higher.
Historically, the halving of Bitcoin has significantly affected the price of Bitcoin. Massive rallies followed the three previous halving events in 2012 and 2016, and 2020 in the price of Bitcoin.
The basic economic principle of supply and demand comes into play here. With a reduced supply of new Bitcoin, and assuming demand for the cryptocurrency remains constant or increases, the price should rise due to this scarcity.
This is because as this event takes place in 2024, there will now be fewer Bitcoins available to buy on the market, making each BTC more valuable.
In accordance Pantera capitalthe next Bitcoin halving will take place on April 20, 2024. And while the market on average peaks 1.3 years after the halving, if history were to repeat 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’s price is not immediate. It may take several months or even years before the full effects can be felt in the market.
This is because the halving event is priced in – it is pre-programmed and known in advance by everyone in the Bitcoin network. Therefore some investors can foresee the halving and has already priced it into the market well before it happens.
In addition, other factors can affect the price of Bitcoin, such as market sentiment, geopolitical events and regulatory changes. These factors can often overshadow the impact of the halving in the short term.
Regardless of the news circulating in the industry, BTC and the rest of the crypto market have been bullish in recent weeks. However, in the last 24 hours, BTC is experiencing a slight retracement down 0.6%, trading at $30,266 at the time of writing.
Featured image from iStock, chart from TradingView.
