Since its inception in 2009, Bitcoin, the pioneering cryptocurrency, has captivated enthusiasts, investors, scammers, and more recently, regulators.
Bitcoin Price Prediction In 2024
To many of its proponents, Bitcoin represents more than just a new currency; it embodies a revolutionary technology that introduced decentralized currencies, laying the groundwork for the cryptocurrency economy.
For others, Bitcoin was a quick profit opportunity. While some early investors joined the ranks of Bitcoin millionaires, many more lost substantial amounts trying to predict its volatile price movements.
Bitcoin’s Price History
Bitcoin has been the subject of numerous price predictions, some quite extreme.
Cathie Wood, CEO of Ark Invest, notably predicted Bitcoin could soar to an astonishing $1.48 million by 2030.
Bitcoin has indeed come a long way from its first recorded price of less than a cent. In March 2024, BTC reached a new all-time intraday high, surpassing $69,000 and peaking at $73,000 before experiencing a decline.
Nicholas Sciberras, senior analyst at Collective Shift, highlights that the notion of Bitcoin reaching a million dollars per unit “really shows how far we’ve come.”
However, Bitcoin’s journey includes both remarkable highs and significant lows.
By May 9, less than two months after reaching its new highs, BTC was trading below $63,000.
Bitcoin’s 2024 Outlook
Bitcoin’s performance in 2024 hinges on various potential catalysts.
Factors such as institutional adoption, the latest halving event, regulatory changes, and macroeconomic trends will influence Bitcoin’s price in 2024.
Two potential scenarios are worth considering: the bullish case and the bearish case.
The Bull Case
Sciberras sees increased demand for block space on Bitcoin’s network due to innovations like inscriptions, ordinals, and BRC-20 tokens as a positive development. These could support the adoption of Bitcoin’s Lightning Network, facilitating faster transactions and potentially making Bitcoin more of a payment method.
“If Bitcoin continues progressing in the payment arena, its utility could increase, helping it achieve higher price targets,” Sciberras notes.
“We are seeing early signs of Lightning Network adoption. Lightning Network’s total payments grew 1,212% over the past two years, and support is increasing.”
Interest Rates and Bitcoin
U.S. Federal Reserve Chair Jerome Powell has suggested the peak of the rate hike cycle may have been reached, which Sciberras believes could catalyze a Bitcoin rally in 2024.
However, after three Federal Open Market Committee meetings in 2024, the Fed has not yet lowered the federal funds rate.
According to CME Group’s FedWatch tool, as of May 9, there is a 97% chance of no rate cut at the Fed’s next meeting in June. However, an 87% chance of a rate cut in September and a 100% chance of at least one rate cut by the year’s end is projected.
Sciberras advises monitoring the core personal consumption expenditures price index (core PCE), the Fed’s preferred inflation measure. Powell has indicated that further rate increases are possible if core PCE rises.
Bitcoin Halving 2024
A key aspect of Bitcoin’s price history is the halving event, which occurs roughly every four years and reduces the rate at which new coins are created.
The latest halving on April 19 decreased the mining reward from 6.25 BTC to 3.125 BTC per block.
“We’ve observed significant price increases around halving events,” Sciberras says.
Many investors view halving as crucial to Bitcoin’s price. However, Sciberras remains cautious.
“There is debate over the halving’s significance versus its timing with external liquidity cycles, which may appear to drive price movements,” he explains.
Institutional Adoption
On January 10, the SEC approved 11 new spot Bitcoin ETFs, including applications by BlackRock, WisdomTree, and ARK, which trade Bitcoin at its current price.
Before this, only Bitcoin ETFs trading futures were approved in the U.S.
Sciberras believes spot Bitcoin ETF approval could significantly influence Bitcoin’s 2024 price, not only necessitating physical Bitcoin purchases but also adding legitimacy to cryptocurrency.
This optimism was reflected in Bitcoin’s price reaching new highs above $73,000 post-SEC announcement, although prices fell below $63,000 by May.
The Bear Case
Bitcoin’s investment risks include long-term security concerns due to decreasing block rewards.
The debate over blockchain inscriptions further complicates matters. While inscriptions could generate sustainable fees, they are also criticized for network congestion.
Environmental impacts also pose a risk. The White House has proposed a tax on Bitcoin miners, which could affect Bitcoin’s price.
Political Issues
Government sentiment shifts could negatively impact Bitcoin. Increased regulation and potential restrictions, such as the U.S. expanding the Bank Secrecy Act, could deter investors.
Is Bitcoin a Worthwhile Investment?
Investing in Bitcoin entails understanding its risks and rewards.
“I’m long-term bullish on Bitcoin,” Sciberras says, citing the macroeconomic backdrop, halving event, and scalability improvements within the Lightning network and BTC spot ETFs.
However, Bitcoin’s future faces hurdles, including governmental targeting and environmental politicization, which could pressure its long-term viability.
Security concerns also persist with decreasing block rewards.
“If adoption and demand wane, or fee revenue falls short, it could compromise network security,” Sciberras warns.
