In the five years leading up to its all-time high, Bitcoin (CRYPTO: BTC) surged by an astonishing 1,760%. However, since reaching that peak in March 2024, its value has declined by approximately 13%.
For many stocks, a swift 13% change might seem significant, but in the volatile world of cryptocurrency, this movement appears relatively mild. Bitcoin has been trading within a narrow range for the past six months, as investors eagerly await a decisive move.
Does this current situation suggest that now is the time to buy Bitcoin while it’s priced under $65,000?
Recent Developments
To say that 2024 has been a momentous year for Bitcoin would be an understatement. The year began with a bang when the Securities and Exchange Commission approved the trading of spot Bitcoin exchange-traded funds (ETFs), a long-anticipated move. This event was seen by industry experts as a major step in legitimizing Bitcoin both on Wall Street and within the broader financial community.
These ETFs offer both individual and institutional investors a straightforward and regulated way to gain exposure to Bitcoin’s price movements. So far, over $17 billion has been invested in various ETF products on the market.
On April 19, Bitcoin experienced a halving event, reducing by half the reward that miners receive for validating transactions and securing the network. This halving occurs roughly every four years and highlights Bitcoin’s pre-set inflation rate.
Historically, Bitcoin has seen significant bull runs in the 12 to 18 months following a halving event. Based on past trends, we may be at the beginning of another strong upward trend.
As 2024 is an election year, Bitcoin has also attracted political attention. Investors are optimistic about the possibility of either presidential candidate implementing policies that favor the growth of Bitcoin and the broader cryptocurrency sector. In July, Donald Trump declared his intention for the U.S. to become the “crypto capital of the planet.”
Another potential catalyst for Bitcoin in the near term could be actions taken by the Federal Reserve, particularly the possibility of cutting interest rates after two years of aggressive rate hikes. From an investment standpoint, lower interest rates often encourage taking on more risk to achieve higher returns. Since Bitcoin is considered a risk asset, it could attract more capital under these conditions.
Keep an Eye on the Big Picture
While Bitcoin’s recent and near-term catalysts draw considerable attention, it’s important not to lose sight of the broader context. Investors should remain focused on the long-term outlook.
