Introduction
Since its establishment in 2009, Bitcoin, the world’s earliest cryptocurrency, has garnered attention from enthusiasts, investors, scammers, and, more recently, regulators.
For many followers, it represents not just a novel currency but a revolutionary technology that introduced the concept of decentralized currencies to the world, laying the foundation for an entirely new economy—the cryptocurrency market.
Yet, for some, it was merely a means to make a quick profit. While a few early investors did join the ranks of Bitcoin millionaires, many more suffered substantial losses trying to predict its price movements.
Bitcoin has been the subject of various price predictions, including Cathie Wood’s bold forecast of $US1.48 million by 2030. Nicholas Sciberras, a senior analyst at Collective Shift, emphasizes the surprise at Bitcoin’s rapid ascent reflected in such predictions.
Putting a precise price target is challenging, as the limit could be boundless depending on adoption levels and external market factors, notes Sciberras. From its initial value of less than a cent, Bitcoin has made remarkable progress, with one unit valued at approximately $US42,000 as of December 20, 2023.
The prospect of Bitcoin reaching a million dollars per unit, according to Sciberras, highlights the significant journey it has undertaken.
However, amidst the potential for remarkable highs, the risk of catastrophic lows also looms.
Bitcoin’s Price History
Bitcoin embarked on its journey in 2009 with the unveiling of the Bitcoin white paper by its mysterious creator, Satoshi Nakamoto. During its initial phase, BTC held a value of less than a cent.
The early years witnessed consistent growth and intermittent surges in value, known as ‘bull runs.’ A notable bull run saw BTC reach $US69,000 in November 2021, but alongside these peaks, there were periods of uncertainty, as highlighted by Sciberras.
Between 2014 and 2017, Bitcoin faced challenges with proposed ‘forks’ that divided the community. These hard forks, and alterations to the blockchain protocol, marked pivotal moments in Bitcoin’s history, with community factions striving to alter BTC’s course. Despite intense debates and multiple forks, Bitcoin persisted in its original form.
Surviving these attempts to alter its course has bolstered Bitcoin’s confidence and resilience, with forks now accounting for less than 1% of its total market cap, according to Sciberras.
In June 2023, BlackRock, the world’s largest asset manager, announced plans for a Bitcoin-specific exchange-traded fund (ETF). This move sparked a trend, with other institutions like WisdomTree and ARK Invest following suit. This institutional adoption drove Bitcoin’s price to nearly $US45,000 in December 2023.
The halving event, occurring roughly every four years, also plays a crucial role in Bitcoin’s price history. Sciberras notes that the price tends to rise significantly a year before and after each halving.
While many investors consider the halving pivotal, Sciberras remains cautious, suggesting that its perceived significance might be influenced by its alignment with external liquidity cycles rather than being an independent trigger for upward price movement.
How Will Bitcoin Perform in 2024?
Bitcoin’s performance in 2024 hinges on a range of potential bullish and bearish catalysts, including factors like institutional adoption, the upcoming halving, regulatory shifts, and broader macroeconomic trends.
In 2023, the crypto industry faced challenges, notably with the US CFTC filing a civil enforcement action against Binance and its CEO, Changpeng Zhao (CZ). However, in a pivotal move, Binance settled with the US Treasury and DoJ in November, with CZ stepping down as part of the agreement. Notably, Binance was not accused of misusing customer funds, and the absence of a bank run on the exchange was a positive outcome for the market, leading to a rally in crypto prices.
According to Sciberras, the resolution with Binance was a significant positive signal for the market, removing a substantial grey cloud that had been hanging over the crypto sector.
Additionally, the indication from Jerome Powell, Chairman of the US Federal Reserve, that the central bank might have reached the peak of its rate hike cycle is seen by Sciberras as a potential catalyst for a Bitcoin rally in 2024.
As interest rates stabilize or decrease, cryptocurrencies like Bitcoin may become an attractive investment due to their perceived hedge against traditional financial systems and increasing scarcity, especially with the approaching halving in May.
Sciberras advises monitoring personal consumption expenditures (PCE) inflation, as Powell has suggested the possibility of further rate increases if inflation starts to rise again.
The interest from institutions like BlackRock in launching a BTC ETF is considered a significant potential boost for Bitcoin. With nearly 10 applications before the SEC, the decision date for BlackRock’s application is set for January 10, 2024, adding anticipation to the evolving landscape of Bitcoin in the coming year.
What is the Future Of Bitcoin?
In forecasting the future of Bitcoin, one must contemplate two potential scenarios: the bullish and the bearish cases.
The Bull Case
In the bullish scenario, Sciberras underscores that Bitcoin’s future may hinge on the resilience, or lack thereof, of traditional banking systems.
With serious issues in the global economy, including a banking crisis and escalating debt obligations in the US, Sciberras notes the occurrence of multiple bank failures in 2023 and emphasizes that the underlying problems persist.
If such bank failures persist into 2024, government intervention to stimulate or print more money might ensue, further devaluing the US dollar akin to the Covid-19 pandemic.
In this context, Bitcoin’s appeal as a known, fair, and resilient asset with a fixed supply, where the rules are not easily altered, could become enticing. Sciberras points to increased demand for block space on Bitcoin’s network due to innovations like ordinals and BRC-20 tokens, signaling positive developments.
The growing adoption of the Lightning Network, enabling faster transactions, could transform Bitcoin into more than just a store of value, potentially becoming a more widely accepted payment method.
Spotting early signs of Lightning adoption, Sciberras notes a 1,212% growth in Lightning Network’s total payments over the past two years, overcoming distribution hurdles with increased support.
Moreover, Sciberras highlights the significance of a potential approval for a spot Bitcoin ETF, as it could inject substantial funds—ranging from $US30 billion to $US300 billion—into Bitcoin, elevating its legitimacy in the cryptocurrency sphere.
Lastly, the introduction of the Financial Accounting Standards Board’s (FASB) new digital asset reporting rules in December 2024 is identified as a crucial factor. These rules, easing reporting and holding regulations for cryptocurrencies, remove a significant hurdle for companies incorporating Bitcoin into their balance sheets.
The Bear Case
In the bearish scenario, potential downsides for Bitcoin come to the forefront, as outlined by Sciberras. Long-term security concerns emerge due to the ongoing decrease in the block reward, posing a challenge for Bitcoin.
Short-term sell pressure is identified as another factor that could adversely affect Bitcoin’s price. Additionally, the divisive debate surrounding ‘inscriptions’ on the Bitcoin blockchain introduces uncertainty. While Sciberras acknowledges their potential for generating sustainable fees in the long term, conflicting opinions within the community, exemplified by Bitcoin developer Luke Dashjr labeling inscriptions as “spam,” set the stage for a possible ideological clash.
Environmental and political issues further compound the bear case. Ongoing critiques of Bitcoin’s environmental impact, including a White House proposal for up to a 30% tax on Bitcoin miners in the US, pose threats to its price action. If Bitcoin faces continued criticism for its energy consumption, it could lead to negative consequences.
The potential rejection of spot Bitcoin ETF applications is highlighted as a risk, potentially triggering a short-term sell-off of BTC. A shift in governmental sentiment against Bitcoin and cryptocurrencies, particularly in the US, is noted as a growing concern. Governments may perceive Bitcoin as a threat to their monetary control, leading to potential restrictions.
Sciberras points to a recent US bill aiming to expand the Bank Secrecy Act, imposing stricter reporting requirements for digital currency transactions, as a notable area of concern. He emphasizes that, in its current form, this legislation could severely impact the US crypto industry.
Moreover, the implications of anti-money laundering (AML) and Know Your Customer (KYC) laws are worrisome for investors. Sciberras underscores the challenges of enforcing high reporting requirements on transfers to private, self-hosted wallets, suggesting that AML laws remain a significant battleground that could pose a threat to the industry due to potential compliance difficulties.
Is Bitcoin A Worthwhile Investment?
Investing in Bitcoin involves weighing both rewards and risks, and a comprehensive understanding of these factors is crucial for making well-informed decisions.
In general, Sciberras expresses optimism regarding Bitcoin’s future. Looking ahead to 2024 and beyond, he maintains a long-term bullish outlook on Bitcoin. He points to the macroeconomic landscape, the upcoming halving in May, advancements in scalability within the Lightning network, and the potential approval of a BTC ETF as positive factors.
However, Bitcoin’s trajectory is not immune to potential challenges. Sciberras notes that if governments persist in targeting Bitcoin and its energy consumption becomes further politicized, it could exert pressure on Bitcoin’s long-term sustainability.
A significant long-term concern is highlighted regarding Bitcoin’s security amid a diminishing block reward. Sciberras emphasizes that if there is lackluster adoption and demand for Bitcoin, or if fee revenue proves insufficient to incentivize miners to upgrade their hardware and mine new Bitcoins, the security of the network could diminish, posing a potential threat.
Price Prediction Of Bitcoin in 2024
Bloomberg suggests that Bitcoin has the potential to exceed $50,000 by 2024, citing the forthcoming halving and an anticipated minimum value increase of 81% as contributing factors.
What Is The Price Of Bitcoin In 2024?
A more conservative projection suggests that Bitcoin, influenced by the factors mentioned earlier, is highly likely to surpass $60,000 in 2024. Although this would remain below its all-time highs, it undeniably represents a substantial and healthy recovery for the cryptocurrency sector.
Will Bitcoin Rise In 2024?
Analyst Markus Thielen anticipates higher cryptocurrency prices in 2024, asserting that these increases are likely, whether or not spot Bitcoin ETF approvals are granted. He cites augmented liquidity, the upcoming Bitcoin halving event, and the potential reelection of Donald Trump as additional catalysts for these expectations.
Conclusion
In conclusion, the future of Bitcoin in 2024 remains uncertain, subject to a myriad of factors influencing both bullish and bearish scenarios. The cryptocurrency’s journey, marked by significant milestones and challenges, reflects its resilience in the face of market dynamics, regulatory developments, and technological advancements.
The bullish case envisions Bitcoin as a potential hedge against traditional financial systems, especially in the context of global economic issues and banking crises. The growing adoption of the Lightning Network and the potential approval of a spot Bitcoin ETF are seen as positive indicators of Bitcoin’s legitimacy and widespread acceptance.
Conversely, the bearish case highlights concerns such as long-term security challenges due to decreasing block rewards, ideological debates within the community, environmental criticisms, and potential governmental restrictions. The ongoing scrutiny of Bitcoin’s energy consumption and regulatory developments, particularly in the United States, pose risks to its price trajectory.
As investors consider the future of Bitcoin as an investment, it is crucial to weigh both the potential rewards and risks associated with the cryptocurrency. Analyst Markus Thielen’s anticipation of higher cryptocurrency prices in 2024 adds to the complexity of predicting Bitcoin’s future value.
While Bloomberg suggests a potential exceeding of $50,000 by 2024 and a more conservative estimate proposes a surpassing of $60,000, the cryptocurrency’s trajectory remains contingent on various catalysts, including institutional adoption, regulatory decisions, and macroeconomic trends.
In summary, the landscape for Bitcoin in 2024 is characterized by a delicate balance between optimism and caution, emphasizing the need for investors to stay informed and vigilant in navigating the dynamic cryptocurrency market.