Since its birth in 2009, Bitcoin, the pioneer of cryptocurrencies, has been a magnet for enthusiasts, investors, fraudsters, and more recently, regulatory bodies. For many, Bitcoin is more than a novel form of currency; it’s a revolutionary technology that introduced the world to decentralized currencies and laid the foundation for a new kind of economy—the cryptocurrency market.
However, for some, it was a quick route to wealth. While a handful of early investors managed to become Bitcoin millionaires, a larger number lost significant sums in their attempts to predict its price fluctuations.
“Bitcoin has been the subject of many price predictions, some of them extreme,” says Nicholas Sciberras, Senior Analyst at Collective Shift. One such prediction came from Cathie Wood, CEO of Ark Invest, who suggested that Bitcoin could reach a staggering $1.48 million by 2030. Sciberras notes that this prediction reflects the widespread astonishment at Bitcoin’s astronomical rise.
“It’s difficult to put any price target out there, as the sky could become the limit depending on the level of adoption and external factors in the market,” he says.
Bitcoin’s journey began with the release of the Bitcoin white paper by its creator, Satoshi Nakamoto, in 2009. The early years were characterized by steady growth and periods of rapid price appreciation, known as “bull runs.” One of the most significant bull runs saw Bitcoin’s price peak at $69,000 in November 2021. However, there were also periods of uncertainty.
“During 2014 and 2017 we saw many Bitcoin ‘forks’ proposed that split the Bitcoin community,” Sciberras says. These forks, changes to the underlying protocol of the blockchain network that split a cryptocurrency into two, represented critical turning points in Bitcoin’s history. Despite heated debates and numerous forks, Bitcoin has remained in its current format.
“Bitcoin surviving these attempts to change it is a core contributor to where BTC is now, increasing its confidence and resilience,” Sciberras says.
Another defining feature of Bitcoin’s price history is the halving event, which occurs approximately every four years and reduces the rate at which new coins are created. The next halving is expected to happen sometime in early to mid-2024.
“We’ve seen Bitcoin’s price significantly increase a year before the halving and a year after,” Sciberras says.
However, he remains cautious about the impact of the halving event on Bitcoin’s price. “The jury is still out on how priced-in the halving is, or how important the event is in the grand scheme of Bitcoin’s price trajectory,” he says.
Bitcoin’s performance in 2024 will be influenced by a variety of potential bullish and bearish catalysts, including institutional adoption, the halving, regulatory changes, and macroeconomic trends.
In 2023, the crypto industry was shaken by a series of enforcement actions that dented confidence in the sector. The U.S. Commodity Futures Trading Commission filed a civil enforcement action against crypto exchange Binance and its founder and CEO Changpeng “CZ” Zhao.
However, Binance settled with the U.S. Treasury and Department of Justice in November, with CZ agreeing to step down as part of the deal. Sciberras notes that Binance was not accused of misusing customer funds and “did not see a bank run on the exchange.”
“This was one of the best outcomes the market could’ve hoped for, and crypto prices rallied as a result,” he says.
Jerome Powell, Chair of the U.S. Federal Reserve, has indicated that the central bank may have reached the peak of its rate hike cycle, which Sciberras believes could be a catalyst for a Bitcoin rally in 2024.
“Estimates forecast three 25-basis-point rate cuts in 2024, a more aggressive outlook than what they have previously signaled,” Sciberras says.
When it comes to predicting Bitcoin’s future, two potential outcomes must be considered: the bull and the bear case.
Sciberras suggests that a bullish future for Bitcoin may depend on the stability, or lack thereof, of traditional banking frameworks. “There are serious issues in the global economy, with the U.S. facing a banking crisis and growing debt obligations,” Sciberras says.
“If bank failures continue in 2024, the government may be forced to step in to provide stimulus or print more money. This would further devalue the U.S. dollar, similar to what occurred during the Covid-19 pandemic,” he says.
“In this scenario, Bitcoin’s role as a known, fair and resilient asset with a fixed supply where the rules of the game are not easily changed could become attractive,” Sciberras says.
Sciberras also highlights the increased demand for block space on Bitcoin’s network due to recent innovations, such as ordinals and BRC-20 tokens, as positive developments.
“If Bitcoin can continue making progress and adoption in the payment front, it could increase its overall utility and become more ‘money’ like—helping it reach those lofty price targets,” Sciberras adds.
In June of 2023, BlackRock, the world’s largest asset manager, filed plans to start a spot exchange-traded fund (ETF) for BTC. This move was part of a broader institutional adoption of Bitcoin throughout the remainder of 2023, driving the price to a high of almost $45,000 in December.
Sciberras lists a spot Bitcoin ETF approval as a key factor influencing Bitcoin’s price in 2024. “The (approval) could funnel between $30 billion to $300 billion into Bitcoin,” he says.
However, every investment comes with potential downsides, and Bitcoin is no exception. Sciberras notes that there are concerns over Bitcoin’s long-term security, given the block reward will continue to decrease. He also mentions the contentious debate about ‘inscriptions’ on the Bitcoin blockchain and the potential ideological clash within the Bitcoin community.
“There are continued attacks on Bitcoin’s environmental impacts, with the White House proposing a tax of up to 30% on Bitcoin miners in the U.S.,” Sciberras says.
A swing in sentiment against Bitcoin and cryptocurrency by governments could also decrease prices. “The U.S. is becoming incredibly hostile towards cryptocurrency and Bitcoin,” Sciberras says.
Despite these potential risks, Sciberras remains optimistic about Bitcoin’s future. “Looking into 2024 and beyond, I’m personally very long-term bullish on Bitcoin,” he says.
However, he also acknowledges potential challenges. “If Bitcoin continues to be targeted by governments and its energy consumption is further politicized, then it could put pressure on Bitcoin’s long-term sustainability,” Sciberras says.
One of the significant long-term concerns for Bitcoin is its security in the face of a decreasing block reward. “If there is lackluster adoption and demand for Bitcoin, or fee revenue is inadequate to incentivize miners to upgrade their hardware and mine new Bitcoins, security could decrease and threaten the network,” he says.
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