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Can 2024 Be a Landmark Year for Bitcoin?

Published 12/02/2024, 17:49
Updated 07/04/2022, 09:55

In 2024, Bitcoin (BTC) seems to be on the cusp of significant change, with the upcoming halving event expected to bolster its fundamentals and reduce selling pressure. This pivotal moment, combined with the surge in interest from innovations like Ordinals and the rapid adoption of Bitcoin ETFs, signals a bullish outlook for Bitcoin’s price. Such ETFs, indicating strong investor confidence, could push prices to new highs, further fueled by a fear of missing out (FOMO) among investors. This article explores the critical factors poised to drive Bitcoin’s value and investor interest in 2024, highlighting a potentially landmark year.

Impact of Halving and Bitcoin ETFs in 2024

Bitcoin is expected to see a notable increase in its fundamentals following this year’s halving event. Halving is a periodic occurrence designed to reduce the reward for mining new blocks by half and thus decrease the rate at which new bitcoins are generated.

This halving will decrease selling pressure and increase interest in Bitcoin-based applications. Innovations such as Ordinals and BRC-20 tokens have revitalized on-chain activity, bringing a new wave of developer interest and innovation to the Bitcoin blockchain. Furthermore, the advent of spot Bitcoin Exchange-Traded Funds (ETFs) has been a significant boon, amassing substantial holdings and indicating strong investor interest. These ETFs are expected to contribute significantly to buying demand, supporting higher prices for Bitcoin in the future and underscoring a fundamentally stronger ecosystem compared to previous years.

Another significant positive prediction for Bitcoin in 2024 revolves around the impact of Bitcoin ETFs on the market. These financial instruments have rapidly amassed impressive holdings of Bitcoin, reflecting a robust appetite among investors for exposure to Bitcoin without the complexities of direct ownership. The inflows into these ETFs are viewed as a crucial market structure change, potentially propelling Bitcoin prices to as high as $112,000. The so-called “worse case” scenario still suggests a significant increase to at least $55,000. The introduction and adoption of spot Bitcoin ETFs have been heralded as a watershed moment for the cryptocurrency, indicating a mainstream acceptance and a potentially transformative impact on its price dynamics.

The fear of missing out (FOMO) on potential gains is also expected to drive a significant rally in Bitcoin prices to new record highs. Analysts from Bernstein have pointed to the clear price catalysts presented by Bitcoin ETFs, noting a marked improvement in market sentiment following the launch of these ETFs and a decrease in outflows from products like the Grayscale Bitcoin Trust.

With new ETFs attracting substantial investments, the market is yet to fully account for the inflow of funds and the consequent scarcity of Bitcoin supply. This dynamic, coupled with the unprecedented success of the ETF launches, suggests that a significant rally may occur even before the anticipated halving event in April 2024, offering a unique investment opportunity for those looking to capitalize on Bitcoin’s momentum.

Bitcoin Price Action Promising So Far

Bitcoin has shown promising price movement, crossing the $48,000 mark this year and edging closer to the critical $50,000 resistance level. This upward trajectory represents a continuation of the significant growth experienced in 2023. Bitcoin saw a 160% increase yet still showed resilience and did not reach the peak interest levels of 2017 and 2021.

Analysts predict that Bitcoin could reach as high as $112,000 if the current trend of ETF-driven buying pressure persists, setting a “worse case” floor at $55,000—a nearly 15% rise from its current standing. This bullish outlook is buoyed by the clear catalyst role of Bitcoin ETFs, which have accumulated significant holdings quickly, and the decreased outflows from the Grayscale Bitcoin Trust.

Bernstein analysts further suggest that, given the successful ETF launches and continuous inflow, a Bitcoin FOMO rally to record highs could occur even before the anticipated halving event in April 2024, marking an exciting phase for Bitcoin’s price movement within the year.

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Disclaimer: Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.

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