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We are only a few months into 2024 and Bitcoin has already exceeded the $50,000 and hit new yearly highs. The question on many people’s minds is how high will Bitcoin go this year?
Will Bitcoin exceed its all-time high of $68,789 from two years ago this year?
While there is no shortage of predictions and forecasts, from reasonable to completely outlandish, the overwhelming majority of experts paint a picture of potential unprecedented highs and significant market movements for Bitcoin in 2024 and 2025.
How accurate are these predictions and what can we expect for the price of Bitcoin at the end of 2024? Let's delve into the reasons why we may be seeing new all-time highs for Bitcoin during this year and into the next.
Institutional Perspectives and Predictions
Recently, an international bank, Standard Chartered revised their Bitcoin price forecast, projecting a price of $120,000 by the end of 2024. Their adjustment reflects a bullish outlook, attributing the increase to factors like miner profitability and a reduction in net BTC supply due to miners selling less and other factors we will cover in this article.
BitQuant also presents a bullish stance, suggesting that Bitcoin could reach new all-time highs even before the next Bitcoin halving (which is anticipated to be mid-April 2024), with a long-term target of around $250,000, based on Elliott Wave charting and anticipated market dynamics.
2024 Bitcoin Halving and ETFs
A significant factor in these optimistic forecasts is the upcoming Bitcoin halving in 2024, historically a precursor to substantial price increases. This event reduces the reward for mining new blocks, effectively diminishing the new supply of Bitcoin and potentially leading to higher prices due to the scarcity effect.
Coupled with the inflow of capital from the Sport Bitcoin ETFs, these developments could catalyze considerable market movements. VanEck, for example, highlights the potential for Bitcoin to remain resilient amidst a possible U.S. recession, with predictions of reaching new all-time highs by Q4 2024 due to the halving, U.S. election, and regulatory shifts.
Potential for a Global Economic Downturn
While there is the potential that we may see a global economic downturn within the near future, for those investors looking for stability, many are turning to Bitcoin as a safe-haven asset. During an economic downturn, investors often seek to avoid market uncertainty, causing them to move away from traditional investments and towards alternative investments. One such alternative investment that has also been the best-performing asset class over the last 10 years has been Bitcoin. This shift towards accepting digital currencies not only underlines Bitcoin's growing acceptance as a digital alternative to gold but also contributes to its price appreciation, as demand surges amidst economic instability.
Long-term holding of Bitcoin
There is a large contingent of Bitcoin holders, fondly referred to as “HODLers”, who make up a significant percentage of Bitcoin and refuse to sell their holdings, which results in diminishing the circulating supply (see: Michael Saylor).
This scarcity, coupled with a capped maximum supply of 21 million coins, has the natural effect of increasing the price of Bitcoin over time and as the demand for Bitcoin continues to grow against a limited supply (and decreasing supply), helps to demonstrate a strong belief in Bitcoin's long-term value proposition and a digital store of wealth.
Lost Bitcoins & Scarcity
It's estimated that around 3 to 4 million (~20%) of all Bitcoins have already been lost, highlighting the significant impact on Bitcoin's scarcity and potential value appreciation of Bitcoin over time. Lost Bitcoins reduce the effective circulating supply, increasing scarcity. Fewer are available for trading and use as Bitcoins are lost (due to lost private keys, forgotten wallets, or sending to unusable addresses). This scarcity will over time contribute to Bitcoin’s price increases, compounding as demand continues to grow in a market with a diminishing supply.
Expert Insights and Economic Indicators
Former Goldman Sachs executive Raoul Pal and billionaire investor Tim Draper further support the bullish sentiment. After reviewing their Bitcoin Chart, Pal suggests that increasing global liquidity could propel Bitcoin beyond $200,000, indicating a significant shift in global finance and the importance of Bitcoin exposure for traditional money managers.
Draper, who is also known for his optimistic Bitcoin predictions, envisions a rise to $250,000 by 2024, underpinned by the growing trend of digital assets and the potential role of stablecoins and smart contracts in facilitating a more streamlined and efficient economy.
Conclusion: A Confluence of Positive Factors
While there is no agreed-upon price valuation for Bitcoin by many experts, can all agree that the outlook for Bitcoin is bullish and both 2024 and 2025 could be landmark years for Bitcoin.
The reason for this is driven by a combination of Bitcoin halving-induced scarcity which is taking place early this year, the increasing institutional adoption we are seeing with the newly approved Spot Bitcoin ETFs, the continuing technological advancements, and potentially favorable regulatory developments.
As we move further into 2024, the anticipation of these events will likely continue to fuel debate and speculation in the crypto community, underscoring the need for due diligence and informed investment strategies in the dynamic world of cryptocurrency.
