2024 is here, and the cryptocurrency market is abuzz with anticipation of what happens next. Beyond the crypto enthusiasts, the rest of the financial world is keenly focused on Bitcoin and the entire cryptocurrency ecosystem due to its popularity and divisive debates about its future.
This year holds the potential to be a watershed moment, where a confluence of pivotal factors could shape Bitcoin’s trajectory for years to come. From the halving event to the evolving global economic landscape, 2024 stands poised to potentially rewrite the narrative and redefine the value proposition of Bitcoin.
This article delves into the intricate tapestry of elements that will play a decisive role in Bitcoin’s fate during the year. To fully comprehend the future of Bitcoin and the broader digital currency ecosystem, investors, observers, and sceptics alike look at major events or themes expected to play a significant role in the year. To understand what could happen in the coming months this article highlights major events that may influence the space:
The Bitcoin Halving
At the core of the 2024 crypto conversation is the Bitcoin halving, a pre-programmed event that occurs approximately every four years, reducing the reward for mining Bitcoin by 50%. Historically, the halving is not only anticipated because of the technical update but also because of the significant price movements that follow.
In previous halving events (2012, 2016, and 2020), Bitcoin experienced substantial increases in value in the months following the halving. While past performance does not indicate future results, these patterns have fueled speculation about a similar upsurge in 2024.
The demand and supply economic principle is the rationale most experts use to explain the positive price action that follows the halving. The halving reduces the rate at which new Bitcoins are produced, thus slowing down the inflation of Bitcoin’s supply. If the demand remains steady or increases, higher prices could result from the reduced supply growth, assuming that market fundamentals remain unchanged. This has led to major price predictions entering the new year. Here are some of the top Bitcoin (BTC) price predictions for 2024:
- Antoni Trenchev, a noted bitcoin bull and co-founder of Nexo, a cryptocurrency exchange, believes bitcoin could hit $100,000 in 2024.
- In 2022, Carol Alexander, a finance professor at the University of Sussex, successfully predicted Bitcoin’s future price. This year, Alexander predicts that BTC will be in the $40,000 and $55,000 range.
- In November 2023, Standard Chartered reiterated its $100,000 bitcoin prediction from April.
- Youwei Yang, the chief economist of Bit Mining, a crypto-mining company, predicts that Bitcoin could reach $75,000 by 2024.
- Seth Ginns, managing partner at CoinFund, told CNBC that the firm believes Bitcoin will likely be valued between $250,000 and $500,000 in 2024.
Bitcoin Spot ETFs: Ethereum Next?
Bitcoin has already made history in 2024 with the recent approval of the first Bitcoin spot exchange-traded fund (ETF) in the United States. This event sent shockwaves through the cryptocurrency world, considering the time it took and the general backlash the industry has received from regulators in the country.
The long-awaited victory for proponents of mainstream adoption has led to some positive Bitcoin predictions for 2024. Some believe this will lead to more interest in Bitcoin, especially from institutional investors. Some also argue that this may lead to more crypto spot ETFs.
Asset management giant BlackRock has filed for an Ethereum spot exchange-traded fund (ETF). Most experts predict that the ETH spot ETF will be approved before the year ends. The SEC’s approval of Bitcoin spot ETFs sets a significant precedent for crypto ETFs. The precedence establishes a legal framework that paves the way for easier approval of similar products.
Considering the growing popularity of Ethereum as the home of financial experiments such as decentralized finance (DeFi) and nonfungible tokens (NFTs), experts are bullish on the impacts of more crypto ETFs like an Ethereum spot ETF. What’s more, the Bitcoin ETF is already gaining significant traction, exceeding expectations in terms of trading volume. This demonstrates a strong investor appetite for regulated crypto exposure, which could translate to a similar demand for an Ethereum ETF.
Despite the optimism, the Ethereum spot ETF will have to jump some hurdles. Despite some similarities with Bitcoin, Ethereum’s technical differences, like staking, may require regulators to make tweaks before approving a spot ETF. Also, with the possibility of multiple Ethereum ETF applications coming, the SEC may take a wait-and-see approach to review multiple applications, causing significant delays.
Regardless of what happens to the Ethereum spot ETF, the approval of a Bitcoin spot ETF in the same year as the halving creates an interesting dynamic. More institutional investors are expected to invest in Bitcoin while the supply reduces, fueling more speculations of explosive price action for the biggest cryptocurrency in the world.
Global Economic Issues and Uncertainties
Another event that could affect the cryptocurrency space is the state of the global economy. The global economy is encountering a few difficulties, such as inflation, escalating interest rates, and geopolitical tensions. These challenges have caused an upsurge in unpredictability and instability in traditional financial markets. Consequently, some investors resort to cryptocurrencies as a substitute or safe haven.
There are several reasons why cryptocurrencies could be perceived as a safe investment during times of economic uncertainty. Firstly, cryptocurrencies are not controlled by governments and are not impacted by inflation. This means that they are less likely to be influenced by changes in government policies or economic conditions. Secondly, cryptocurrencies are global assets that are not tied to any specific country or economy. This makes them less vulnerable to regional economic issues.
The phenomenon of people hedging against inflation and other harmful impacts of economic crises is already happening in developing markets like Nigeria. Multiple Africans have adopted Bitcoin and stablecoins like USDC and USDT as stores of value. This trend will likely increase as more countries struggle to deal with economic retrogression.
As we look forward to events that may impact the growth of Bitcoin and other cryptocurrencies in 2024, companies are building to meet the demand that comes with adoption. Meet the top African crypto companies at the Africa Tech Summit 2024 in Nairobi.
