Bitcoin has been on a wild ride since early 2023, rising over 80% since January. Despite this, many experts believe that the current rally could be just the beginning and that Bitcoin has the potential to surpass its previous highs.
In the last five months, Bitcoin has risen from a significant low of $16,000 late last year to trading as high as above $31,000 in the last 24 hours. While the asset might have shown quite an apparent recovery, research shows that BTC could post more gains in 2024.
Why Bitcoin Could Record Massive Highs in 2024
Although Bitcoin You have several notable factors that influence your recovery. However, one of the crucial factors that could contribute to massive asset growth in 2024 is the continued decline in the Dominance of the US dollar and the crisis of 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 the country’s federal authorities closed major US banks such as Silvergate, Silicon Valley and Signature Bank.
This greatly affected the value of Bitcoin in March as investors sought another saving option, allowing BTC to push its price above $25,000 for the first time in several months. Another factor that could fuel Bitcoin’s rally in 2024 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 set at 21 million. As more people buy and hold Bitcoin, the supply available on exchanges decreases, which could lead to increased demand and higher prices.
The Bitcoin halving that will take place in 2024 is known to fuel 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 that less BTC is created and sold on the market.
Can Bitcoin’s halving impact its 2024 rally?
The BTC halving is a highly anticipated event in the crypto community. Many are hoping this could be a good enough catalyst to push the asset past its $69,000 peak and drive the crypto market higher.
Historically, the Bitcoin halving has had a significant impact on the Bitcoin price. Massive rallies followed the three previous halving events in 2012 and 2016, and 2020 in the price of Bitcoin.
Here the basic economic principle of supply and demand comes into play. With the reduced supply of new Bitcoin, and assuming that the demand for the cryptocurrency remains constant or increases, the price should increase due to this shortage.
This is because since this event will take place in 2024, there will now be less Bitcoin available to buy on the market, making each BTC more valuable.
According Capital PantherBitcoin’s next halving will occur on April 20, 2024. And while, on average, the market peaks 1.3 years after the halving, if history repeats itself, the next Bitcoin halving will 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 price of the cryptocurrency 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 event comes at a price: it is pre-scheduled and known in advance to everyone on the Bitcoin network. Therefore some investors You can anticipate the halving and have already listed it on the market long before it happens.
Additionally, other factors can affect the price of Bitcoin, such as general 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 for the past few weeks. However, in the last 24 hours, BTC is experiencing a slight retracement of 0.6%, with a trading price of $30,266, at the time of writing.
Featured image from iStock, chart from TradingView.
