As the crypto winter subsides, and with the optimism accompanying the new year, it’s worth delving into what 2024 could hold for Bitcoin ($BTC). Can it sustain the momentum of the past year, or is a correction on the horizon?
Taking a closer look, Bitcoin has more than doubled in value since the challenging crypto winter of 2022. Following the contraction, as observed in any market or ecosystem, growth often ensues. Despite the ambiguity surrounding the duration of crypto bear markets, the consensus is that the recent one was among the lengthiest in crypto’s history, making a significant resurgence likely.
After a remarkable 150% surge in 2023, Bitcoin would need to more than double in value again, marking a 115% increase from current prices to hit $100,000. While Bitcoin is known for rapid gains, reaching the coveted six-figure mark prompts the question of feasibility.
To simplify the answer, we must consider two variables: supply and demand. Bitcoin will undergo its fourth halving this year, a crucial aspect of its monetary policy that halves its supply growth rate approximately every four years. The current rate of supply growth stands at 1.75%, but after the upcoming halving in April, it will fall to 0.85%.
The reduction in supply growth exerts upward pressure on prices, historically resulting in an average 128% increase during halving years. If this pattern repeats, Bitcoin’s price could surpass $100,000 from its current $46,000 level.
An additional factor comes into play—currently, only 2.3 million Bitcoins are available for purchase on exchanges, the lowest level since 2017. This halving will mark the first time in Bitcoin’s history with fewer coins on the market than at the time of the previous halving, intensifying the supply shortage.
With the recent approval of the first spot Bitcoin exchange-traded fund (ETF) by the Securities and Exchange Commission, ongoing technological innovations, and the prospect of a bull market, 2024 holds promise for Bitcoin. Considering these factors, alongside the upcoming halving and unprecedented supply shortages, the likelihood of Bitcoin reaching a $100,000 price tag seems increasingly plausible. In fact, envisioning a scenario where Bitcoin surpasses six figures in 2024 is not far-fetched.
