Earlier this week, the cryptocurrency community scored its first major victory of 2024 with the approval of spot Bitcoin ETFs in the United States. This has sparked a lot of excitement, catapulting Bitcoin to a cycle high of $49,000. Now eyes are on the next major event in May: the Bitcoin halving. Post-halving investors believe Bitcoin will gather enough momentum to break through its 2021 all-time high of $69,000.
Read on as we explore this possibility and the impact of a Bitcoin boom on the broader cryptocurrency market.
Bitcoin Price History 2021-2023: Boom, Bust, and Potential Bounce Back
2021 was a tremendous year for the cryptocurrency industry. Nearly every crypto coin and token skyrocketed to new highs. Bitcoin rose to an all-time high of $68,770, with a market capitalization exceeding $1 trillion.
Then 2022 came, and everything changed. The once-thriving market faced a brutal reckoning, with the Terra/Luna crash, FTX downfall, and regulatory crackdowns sending shockwaves through the industry. By December 2022, the value of Bitcoin had plummeted from just a steak shy of $69,000 to around $16,000.
The crypto winter thawed out in 2023, with a significant recovery across the board. BTC saw a 150% price increase, closing the year above $42,000. Several positive trends contributed to the recovery. Easing global inflationary pressures drew more investors back to riskier assets. In addition, several regulatory developments pointing towards clearer cryptocurrency laws increased investor confidence and stabilized the market. As the regulatory fog lifted, institutional investors began to dip their toes into the industry.
These glimmers of progress and Bitcoin’s historical resilience laid the groundwork for a renewed bull run in 2024.
Spot ETF & Halving 2024: Can They Launch Bitcoin to New Heights?
Two key factors stand out as potential catalysts for a Bitcoin boom in 2024: spot ETF approval and the May Bitcoin halving event. But can they propel the asset past ATH?
Bitcoin nears $49k for the first time since 2021 as US ETF Trading Starts
On Wednesday, January 10, 2023, the U.S. Securities and Exchange Commission (SEC) approved the first exchange-traded funds (ETFs) to track Bitcoin in the country. For over a decade, asset managers in the country have advocated for a spot Bitcoin ETF. The SEC giving in after a series of rejections over the years was a huge win.
Unlike the already approved Bitcoin futures ETFs, which hold derivatives contracts tied to Bitcoin, a spot ETF holds actual BTC and directly tracks its price. This development is set to attract more institutional and retail investors to Bitcoin, boosting demand and liquidity.
Eleven asset management firms, including industry titans like BlackRock, Fidelity, and Grayscale, applied to offer Bitcoin spot ETFs. Trading volume exceeded $7.6 billion in the first two days. All of this validates the prediction of growing institutional and retail investor interest. And sure enough, the price of Bitcoin soared past $48,000 for the first time in nearly two years.
Bitcoin Halving 2024 Countdown: Why Does It Matter?
After every 210,000 blocks or approximately every four years, the Bitcoin mining reward is reduced by half. This is called the Bitcoin halving event. After each halving event, miners earn half as many coins for adding blocks to the Bitcoin protocol. For instance, since the last event in 2020, miners have earned 6.25 BTC, which will reduce to 3.125 BTC this year. As a result, the number of bitcoins entering circulation will fall.
The logic behind halving is simple: a lower supply of Bitcoin and an unchanged or potentially higher demand will boost the price. Historically, halvings have coincided with Bitcoin price booms a few months after halving, prompting speculation about similar behaviour in 2024. However, the period leading up to and shortly after the event is rocked by price volatility.
Bitcoin 2024 Price Prediction
Bitcoin is currently hovering around $43,000. BTC has yet to make significant gains in 2024 despite briefly soaring close to $49,000 post-ETF approval. However, BTC bulls are optimistic that the asset will see notable gains later in the year as the effects of the spot ETF and upcoming halving become more evident.
Here are some expert predictions on the price of Bitcoin in 2024:
- VanEck, a global investment fund, predicts that Bitcoin will reach new all-time highs by Q4.
- Mark Mobius, who correctly predicted that Bitcoin would fall to $20,000 in 2022, predicts that BTC could reach $60,000 by the end of the year.
- James Butterfill, head of research at CoinShares, is more bullish, predicting a climb to $80,000. However, James believes that the halving is priced in. Instead, he bases his predictions on ETF approval and interest rate cuts.
- Late last year, Standard Chartered doubled down on an earlier prediction that Bitcoin would reach $100,000, owing to the approval of numerous ETFs.
- Seth Ginns of CoinFund Venture Capital has the most bullish forecast for Bitcoin in 2024. Seth predicts the price will rise to between $250,000 and $500,000.
What does a new Bitcoin ATH mean for the rest of the crypto market?
When the price of Bitcoin rises, investor confidence grows, and this may spill over into the altcoin market as investors seek diversification and higher returns. This ignites another wave of rallies known as the altcoin season. During this period, altcoins experience significant price increases, outperforming Bitcoin. Investors are diversifying their portfolios and looking beyond Bitcoin to emerging altcoins in sectors such as DeFi, NFTs, and Web3.
While riskier, the alt season generates the highest returns and accounts for the most crypto millionaires. The narratives set to dominate the 2024–25 bull run include:
- Decentralized finance
- Artificial Intelligence
- Real World Asset (RWA) tokenization
- Web 3 Gaming
- Meme coins
Conclusion
2024 stands as a pivotal year for Bitcoin and the broader crypto market. The recent ETF approvals and the upcoming halving event paint a positive picture for the entire industry. If the next bull run is anything like previous ones, it will set new highs, creating a new cohort of crypto millionaires.
However, cryptocurrency remains a highly volatile asset class, and investing in it carries significant risk. Always conduct thorough research, understand your risk tolerance, and invest only what you can afford to lose.
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It is always fast, profitable, and reliable! The platform has been tested by time and all the “bad weather” of cryptocurrency development.
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