Bitcoin
Is Bitcoin on track to take a big step and reach $100,000 in 2024?
Exceeding expectations is nothing new for Bitcoin.
In the last 15 years, Bitcoin (Bitcoin 0.36%) has already surpassed almost all projections, estimates and expectations. In just over a decade, cryptocurrency has grown from just a few cents per digital coin to over $50,000 by 2021, taking the world by storm.
Priced at around $70,000 in June 2024, the next big milestone in sight is the coveted six-figure mark. As sensational as it may sound, history tells us that a $100,000 price tag is increasingly likely. But the real question is: when will Bitcoin surpass $100,000? Could it be in 2024?
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Measuring the effect of halving
Any prediction like this is inherently speculative. But a little speculation can be healthy and force us to evaluate the long-term evolution of an investment.
To predict Bitcoin’s performance, it is imperative to consider the trends surrounding the reduce by half. The halving is a pre-scheduled event that occurs approximately every four years. It halves the reward for mining new blocks and forms the basis of Bitcoin’s robust monetary policy.
This mechanism effectively decreases the rate of creation of new bitcoins over time, contributing to Bitcoin’s scarcity and, historically, its price appreciation. Bitcoin recently underwent its fourth halving in April 2024, sending its inflation rate to just 0.85%.
Due to the clear influence that the halving has on the dynamics around Bitcoin supply and demand, we can form our projection around it by looking at previous halvings. In the year that Bitcoin is halved, its price increases by about 125% on average. If we measure from its price at the beginning of the year ($44,000), a 125% increase would put its price at $99,000.
A new variable to be accounted for
If this halving has a similar effect to the previous ones, it looks like Bitcoin should be close to the $100,000 mark in 2024. But to add more certainty to the fact that 2024 is the year Bitcoin hits six figures, there is a another variable we need to consider.
Unlike previous halving cycles, this one has a new factor that could be the extra boost the cryptocurrency needs to surpass $100,000: Spot Bitcoin ETFs. For most of Bitcoin’s history, its rise was primarily driven by retail investors like you and me. But with Bitcoin ETFs in sight, with deep pockets institutional investors You can start accumulating Bitcoin without regulatory or custody concerns.
The arrival of institutions, coupled with expanding access to retail investors who might previously have felt uncomfortable purchasing Bitcoin on a cryptocurrency exchange, was expected to place additional pressure on the Bitcoin supply. In fact, we are already seeing the net effect of this new vehicle for exposure to Bitcoin.
In February, ETFs were buying 10 times Bitcoin’s daily production rate (about 900 bitcoins per day), helping to push its price higher. new historical record. While the buying rate has cooled since then, it’s probably safe to say we’re just seeing the tip of the iceberg. The most important thing, however, is that if purchases returned to these levels, ETFs would be exceeding the daily supply of Bitcoin by 20 times the rate due to the now approved halving.
The end result
2024 appears to be the year Bitcoin hits $100,000. With its price close to $70,500 today, this represents a remarkable opportunity with a nice 40% gain.
However, we must keep in mind that it is usually in the year following the halving that Bitcoin makes its most impressive gains. During these years, after the full effect of the halving materialized, Bitcoin soared by an average of more than 400%. If for some reason Bitcoin doesn’t reach $100,000 this year, 2025 would be the next safe bet.
Whether this happens this year or next, one thing is certain: the continued halvings, growing adoption, and institutional involvement make a strong case for Bitcoin to continue surprising us in the years to come.