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Ruth Kise 28 Dec 2023 ◦ 13 min read

What's Next For Bitcoin

What's Next For Bitcoin

Bitcoin is the first-ever cryptocurrency with the highest price. The uniqueness of BTC, its potential for growth, and its ability to influence other cryptocurrencies are of great interest to investors and traders. This year market capitalization of Bitcoin reached $856,359,584,359, and other digital assets directly depend on its rate. 

2023 was a difficult year for cryptocurrencies and for Bitcoin in particular. However, at the end of this year, we observe a bull trend in the market and an optimistic mood after a two-year-old winter. What to expect from the coin in 2024? Let's look at factors that can affect it and forecasts from the leading analysts.

Bitcoin's Evolution Milestones

To better understand and evaluate the future of the coin, it is worth looking at its development in history.

The Bitcoin Protocol was launched on January 3, 2009. However, for a long time, Bitcoin as a means of payment was not particularly valuable. In 2012, the first halving of Bitcoin took place. At that time, this event did not greatly affect the coin exchange rate, but in 2013 the value of BTC exceeded $22.

Bitcoin's exchange rate was badly damaged by the liquidation of the largest crypto exchange of that time, Mt.Gox. Many serious investors have become critical of digital currencies. So, Warren Buffett called BTC a "bubble." Many agreed with him, but everything changed 8 years later after the launch of BTC.

2017

This spring, the Japanese authorities passed a law legalizing crypto payments.

In the summer, a fork took place, as a result of which the Bitcoin Cash cryptocurrency appeared - an alternative to Bitcoin with a limited block size.

In December, trading in Bitcoin futures was launched on the Chicago Commodity Exchange.

As a result of the above events, the BTCUSD rate has grown significantly. Trading on January contracts started at $20,600.

2018

The first "crypto winter." Regulators banned ICO (initial coin placement) and restricted the operation of crypto exchanges. Digital asset quotes have been falling for a long time. In some countries, such as China, digital assets have been banned altogether. Many blockchain projects were forced to close, and the BTCUSD fell below $3,700.

2020

On May 11, Bitcoin's third halving took place, which led to a slight increase in quotations. MicroStrategy (today the largest investor in Blockchain) has seriously invested in Bitcoin. In December, there was a scandal around Ripple. The US Securities and Exchange Commission (SEC) has accused the coin's creators of illegally issuing securities in the form of XRP tokens. The case ended in favor of the SEC. This event has seriously affected the entire industry. Also in 2020, there was a boom in DeFi, but at the end of the year, the cryptocurrency market collapsed amid the COVID-19 pandemic.

2021

In 2021, there were many important events in the history of BTC. The most significant is Tesla's investment. In February, it became known about investments for $1.5 billion, which gave the coin significant weight. In May, China is increasing pressure on miners, and many of them moved to the USA. In the same year, Bitcoin was recognized as an official means of payment in El Salvador. As a result, on November 10, the price reached the maximum at $68,789, and the capitalization of the crypto market for the first time exceeded $3 trillion.

2022

First, the Terra blockchain crashed, and then Tesla sold 75% of its Bitcoins. A little later, one of the largest FTX cryptocurrency exchanges went bankrupt. And the SEC continued to increase its pressure on cryptocurrencies. This led to the crypto winter, and Bitcoin falling to $15,000.

2023

Feb. The SEC has increased pressure on the crypto industry. The market is in a wary mood all spring. The crypto community is closely monitoring the SEC's case against Ripple and other proceedings. By June, the list of cryptocurrencies, which are illegally issued securities in the judgment of the SEC, exceeded 60 positions. At the same time, an investment giant Black Rock is sending a request to launch a spot Bitcoin ETF. Meanwhile, the SEC sued the two largest crypto exchanges: Binance and Coinbase. In July, the court decides the case in favor of Ripple, the entire crypto world rejoices, and the mood in the market begins to change.

Important Recent Events in the Market and regulatory environment

Since mid-October, Bitcoin has begun a rapid growth amid news of a possible SEC approval of the first ETF for Bitcoin: on January 10, the deadline for consideration of relevant applications from Ark Invest and 21 Shares expires, and in March they should consider an application from BlackRock. In less than a month, the rate of the first cryptocurrency increased by almost $10 thousand.

Inflation in the United States is declining, which also seems to have a positive effect on the growth of cryptocurrency. Even despite the statements of FRS officials who say that it is not time to cut rates, no one is waiting for their increase.

And do not forget about halving, which is expected in April 2024, after which the rate of inflow of new Bitcoins to the market will halve. Bitcoin has already survived three halvings, and each of them took the coin to new absolute price highs. In pursuit of the expected benefit, many investors are starting to buy Bitcoin, which pushes the cryptocurrency exchange rate up.

Potential Solutions And Developments

Let's talk more in detail and critically about halving and the launch of spot ETFs which everyone is waiting for.

Bitcoin Halving

Bitcoin's halving goal is to maintain the deficit and the value of the currency while regulating inflation. It is assumed that as the number of newly issued Bitcoins decreases, the demand for them will grow, and prices will increase. The economic concept of supply and demand is at the heart of this. However, cutting doubles the cost and complexity of mining, which reduces the profitability of miners. This can lead to the departure of some miners from the market, which will reduce the hash rate - the total computing power of the network and its security.

When the number of blocks reaches 840,000 in April 2024, another Bitcoin halving will take place. Then the reward for the block will decrease from 6.25 to 3.125 Bitcoins. This will be the fourth halving of the main cryptocurrency in history. The last three halvings occurred in 2020, 2016, and 2012. The graph below shows how Bitcoin's price increased significantly after each halving.

On November 28, 2012, the reward for the block was reduced from 50 to 25 Bitcoins, which was the result of the first halving in history. On that day, the price of Bitcoin was $12.35. After 150 days, the price rose by 928% and reached $127.00.

On July 9, 2016, the reward for the block was again halved - from 25 to 12.5 Bitcoins. On this day, the price of Bitcoin was $650.63. After 150 days, the price rose by 16.6% to $758.81.

On May 11, 2020, there was a third and the last at the moment decrease in the remuneration for the block - from 12.5 to 6.25 Bitcoins. On this day, the price of Bitcoin was $8 566.42. 150 days later, the price rose by 25.8% to $10 778.81.

Now let's move on to the upcoming halving in April 2024. What are we seeing? Bitcoin began to grow in January 2023, that is, about a year and a half before halving. Thus, the current cycle is more like the events of 2020 (it is not known whether there will be a drawdown before April), and not the ones that were in 2012 and 2016. At the same time, there is no talk of any historical highs. Moreover, the growth of the Bitcoin exchange rate is quite modest in comparison with the periods that preceded the past halving - at the beginning of December, about 150%. In general, the situation is not new, and whether the expectation of halving will continue to contribute to price growth cannot be definitively answered.

However, some researchers and enthusiasts, relying on these historical trends, make positive forecasts regarding the price of Bitcoin after halving in 2024.

Spot ETF Approval

For more than six months, the US Securities Commission and Exchange (SEC) have been considering the possibility of approving the launch of spot exchange-traded funds for Bitcoin. They say a whole special group of specialists is working, assessing all the risks. As a result, with a regular frequency, the timing of the decision on applications is shifted. Actual dates are the period from January 5 to 10, 2024.

So far, retail investors can only access cryptocurrencies through ETFs that trade cryptocurrency futures. The Bitcoin spot ETF will allow investors, especially retail investors, to access Bitcoin without having to keep their investments in the Bitcoin wallet.

Analysts expect big money to flow into Bitcoin spot ETFs if the SEC gives its approval, and that optimism has helped boost Bitcoin's price, with the Bitcoin spot ETF market expected to grow to $100 billion over time, according to a Bloomberg report.

The report from Galaxy estimates the inflow of Bitcoin ETFs into spot products could grow from $14 billion in the first year to $39 billion within three years.

Still, uncertainty remains over the SEC's decision. The SEC has reportedly held several rounds of talks with potential ETF issuers, with issuers updating the applications to meet regulatory expectations.

Overall, we can observe that with the date of possible approval of spot ETFs approaching, investors are full of optimism.

Future Predictions

Proceeding from the above factors, many experts build optimistic forecasts about next year for Bitcoin. Here are some of them (we arranged them in ascending order of optimism level).

JPMorgan - $45,000

Analysts of the American bank took a conservative position, having doubted the possibility of Bitcoin reaching a historic high (ATH) even after a halving.

JPMorgan considers that the course BTC will rise to $40,000-45,000 against the background of the gold growth as two assets, as a rule, move in tandem and are considered as alternatives to the traditional investment markets.

The trader Michael van de Poppe - $55,000

The popular trader and analyst Michael van de Poppe is considering the inevitable growth of Bitcoin at least to $ 50,000-55,000 in anticipation of a halving. He proved the forecast by comparison of cycles which show good comparability thanks to this event.

The expert also noted the pessimism of participants in the market. According to him, the turn usually occurs at the moments when nobody expects it and doesn't want to see it.

The ex-CEO of BitMEX Arthur Hayes - $70,000

The former CEO of the cryptocurrency exchange BitMEX Arthur Hayes is sure that in 2024 Bitcoin will update ATH on marks higher than $70,000 then there will be a rapid fall.

CEO Blockstream Adam Back - $100,000

The head Blockstream developer blockchain Adam Back predicted the growth of Bitcoin to $100,000 to a halving. He even put 0.01 BTC (about $270 today) on the outcome of events till March 31, 2024.

The CEO of Bitcoin startup Jan3 Samson Mow agrees with him and expects ATH before halving too, but not later.

Standard Chartered - $120,000

Analysts of Standard Chartered Bank expect growth of Bitcoin to $120,000 by the end of the next year. At the same time, experts allowed BTC for $50,000 in 2023. At the same time in April, their position was more conservative - $100,000 at the end of 2024.

Matrixport - $125,000

The head of the department of research of crypto financial service Matrixport Markus Thielen predicted the achievement of a mark of $125,000 by the first cryptocurrency by the end of the next year.

His forecast is based on average historical data in anticipation of the previous halving. According to these calculations, Bitcoin will rise in price up to $125,731 by December 18, 2024.

Analysts took the asset's achievement of a new annual high as a starting point, which has historically indicated the end of the bear market and the beginning of the bull market. At the same time, the expert deliberately ignores the influence on calculations of results of the first halving, calling them "epic and disproportionate". Considering them, the first cryptocurrency will fly up to $507,552 to the date specified earlier.

Pantera Capital - $148,000

Analysts of a hedge fund Pantera Capital with assets of $4.2 billion expect growth of Bitcoin to $147,843. The indicator is based on a metric of Stock-to-Flow which predicts the asset price proceeding from a stock ratio to production.

The last episode in 2020 reduced the offer of new coins by 43% in comparison with the previous event. If history repeats, at the following halving the price will grow to $35,000 the day before and $148,000 after the reduction of an award to miners twice.

The co-founder of Fundstrat Tom Lee - $150,000

Except for halving, the crypto community also has other potential factors for the growth of Bitcoin - for example, approval of ETFs by the SEC based on the spot price of the first cryptocurrency. In August the cofounder of the analytical company Fundstrat Tom Lee allowed Bitcoin for $150,000 in case of such an event.

And though so far SEC hasn’t approved any of a set of requests for start spot Bitcoin-ETF, even in the fall of 2021 the regulator resolved two such tools based on futures for the first cryptocurrency from ProShares and VanEck.

In general, analysts highly estimate the chances of approval of Bitcoin-ETF after the satisfaction with the American court of the petition of Grayscale Investments in the case against SEC. The company managing assets of $50 billion submitted a claim against the regulator in June 2022 for refusal to transform GBTC trust to Bitcoin-ETF.

The former head of SEC Jay Clayton called inevitable the approval of the tool by the Commission. The cofounder of venture Morgan Creek Digital Anthony Pompliano and the head of the mining company Marathon Digital Fred Til are solidary with him.

To Sum Up

At the moment, an optimistic mood prevails in the cryptocurrency market, and the Bitcoin forecasts are mostly positive (some think that they are over-positive). At the time of this writing, BTC is trading at $43,614, which means that it is unlikely to fall below the $38,000 level even if regulators refuse to approve a Bitcoin ETF. Whether cryptocurrency can hit a new high of $45,000 in the last week of the year - let's see, the bull run is only getting steam. One thing is for sure, next year promises us many interesting events in the market. Watch closely the situation and grab the bull by the horns.

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