Many analysts and cryptocurrency experts predict Bitcoin to reach an all-time high in 2024. Currently, the price of Bitcoin on Kraken at the time of writing this article sits at $62,252, a little lower than its all-time high of $69,044 in the 2021 crypto market bull run.
Based on expert prediction and industry specialists, bitcoin might likely attain an average peak of $87,875 and an average low of $35,734. With Bitcoin showing incredible prospects due to several factors, this might be a good time to diversify your investment. However, you must understand the following factors that might affect Bitcoin’s price increase in the coming months.
The Halving
Bitcoin’s halving event is scheduled to be held in 2024. Bitcoin is run on the blockchain ledger, and the miners validate entries with computer arrays by solving complex mathematical puzzles. These miners are paid with Bitcoin for completing any transaction called a block. This protocol states the reward for every block halves for every 210,000 blocks, which is about four years.
This reward started in 2009 with 50 bitcoin and would drop from 6.25 Bitcoin to 3.125 Bitcoin in the middle of April 2024. This fall means that there will be fewer bitcoins sold in the market, tightening supply, squeezing out lesser efficient miners, and significantly reducing the power used by the network. The last three halves resulted in bull runs and drove up the prices of bitcoin. Therefore, this year might also be a good time to buy Bitcoin.
Interest rates
The chairman of the United States Federal Reserve, Jereme Powell, indicated an increase in interest rates, prompting the Fed to likely reduce them in 2024. If the interest rates are reduced or unable to stabilize in 2024, this could make Bitcoin and other digital assets more beneficial to investors. A major reason for this would be due to its limited supply which can be edged against traditional currencies. Generally, interest rate cuts usually prompt investors to search for better investment returns, and cryptocurrencies can deliver that.
The ETFs
The SEC greenlighted a type of investment known as the exchange-traded fund (ETF) for the spot or general bitcoin market. ETF already exists for other commodities such as oil, FTSE 100, regions, and countries. The ET tracks an asset, allowing individuals to invest without the need to buy the asset directly. Till now, ETFs allowed in crypto in the United States have been for the future market. The addition of a spot ETF might likely encourage investors to partake in the market, potentially attracting the big players, including banks.
Blockchain Development
In 2023, bitcoin witnessed various technological advancements, including a unique and new type of non-fungible tokens called ordinals and new standards like the BRC-20, allowing the creation of new cryptocurrencies on the Bitcoin network. Before now, new cryptocurrencies and NFTs were mostly issued on blockchains like Ethereum. However, we are now experiencing a growing adoption of the Bitcoin blockchain, which could also lead to Bitcoin demand and, therefore, higher prices.
Endnote
Many cryptocurrency excerpts hold a strong case for Bitcoin going bullish by the year’s end. Many predict an extreme ROI for holding Bitcoin throughout the year. However, though the road might not be smooth, 2024 could see an unprecedented increase in cryptocurrency adoption, which will drive the price of Bitcoin higher. Remember that cryptocurrency investment involves a lot of risk. Ensure that you speak with a financial adviser before embarking on a cryptocurrency investment.