Since the end of 2023, the Bitcoin price has increased and started gaining significant momentum in March 2024. Indeed, Bitcoin reached a new all-time high in March 2024, breaking past USD 70,000. There hasn’t been a new all-time high in over two years since November 2021, when it reached $68,991. Now, you might wonder why the Bitcoin price is going up. In this article, we’ll look at the possible factors that can influence BTC prices.
Understanding why the Bitcoin price is going up
In March 2024, the Bitcoin space witnessed a significant surge in the price of (BTC). This sharp rally intrigues investors and analysts; many expected it to happen later this year. As Bitcoin surpassed key resistance levels and reached new highs, everyone is wondering why the Bitcoin price is going up. Let's dive into potential factors that could be contributing to Bitcoin's price rally in March 2024.
Does Bitcoin halving increase BTC price?
The Bitcoin halving is a crucial event in the blockchain ecosystem that cuts the mining reward down in half. But, does the Bitcoin halving increase the Bitcoin price? Let’s analyse that.
First, let’s have a refresher on what the Bitcoin halving is. The Bitcoin halving is a blockchain event that reduces the generation rate of new Bitcoins and thereby decreases the available supply. Halvings happen approximately every four years on the Bitcoin blockchain, with the next one expected in mid-April 2024Historically, the Bitcoin price tends to increase after a halving event, as illustrated in the table below. The supply reduction associated with Bitcoin halvings often creates supply-demand imbalances, potentially contributing to those price increases.
Source: https://www.statmuse.com/money
However, the Bitcoin price is already setting new records pre-halving. While many expect a further increase in prices post-halving, there’s absolutely no certainty in this.
Correlation with Bitcoin’s 4-year cycle
Closely tied to the Bitcoin halving is the Bitcoin 4-year cycle. Historically, Bitcoin has been going through 4-year cycles which consist of a specific pattern:
An upward trend of three years (bull market)
And a downward trend of one year (bear market)
To date, Bitcoin has been through 4-year cycles, and the pattern mentioned above proved to be interestingly accurate, as shown in the graph below.
As three years have passed since the last Bitcoin ATH, speculation about a new cycle and upward trend in Bitcoin prices has increased. While halving and the Bitcoin 4-year cycle could explain why the Bitcoin price is going up, Bitcoin price can also be heavily influenced by other external factors.
Is the US approval of Bitcoin ETFs related to the price jump?
Let's consider another element that might be influencing Bitcoin's price increase: the approval of spot Bitcoin ETFs. This development could be playing a significant role in driving up Bitcoin's value.
The US Securities and Exchange Commission (SEC) greenlit 10 spot Bitcoin ETFs in January 2024, enabling investors to trade Bitcoin at its spot price. This development has paved the way for investors to gain direct exposure to Bitcoin without the need to hold the cryptocurrency.
The approval of the first Bitcoin ETFs in the US has had a bullish effect on Bitcoin prices. Indeed, Bitcoin witnessed a substantial surge from under USD 50,000 at the time of approval to above USD 70,000 in March. Why?
These ETFs offer a less risky way for investors and institutions to engage with cryptocurrencies.
Buying Bitcoin via ETFs is also much more convenient. Indeed, investors and institutions can use popular investment management apps instead of having to open an account on exchanges. Also, transferring funds to exchange is not so easy.
Overall, ETFs are much more convenient than other options for accessing BTC. These are some reasons why ETFs have attracted a significant influx of capital, contributing to the upward momentum in Bitcoin prices.
However, it's essential to consider that market dynamics are complex, and other factors may simultaneously influence Bitcoin's price movements.
What price will Bitcoin reach in 2024?
It’s undeniable that there’s currently significant momentum with BTC and strong sentiment that the crypto bull run will be amplified throughout 2024. Now that we’ve seen potential reasons why Bitcoin price is going up, you might wonder, “What price will Bitcoin reach in 2024?”. Let’s explore some market predictions for Bitcoin in 2024.
Back in September 2023, a NASDAQ article predicted that the price of Bitcoin could go up USD 250,000 post-halving, while the Coincodex algorithm estimated that it could increase to over USD 88,000 three months after the halving.
More recently, another article shares other opinions that Standard Chartered anticipates Bitcoin will reach USD 100,000 by the end of 2024, while Fundstrat estimates Bitcoin to be between USD 116,000 and USD 137,000.
In conclusion, these forecasts provide valuable insights into potential price movements. But it's essential to approach them with caution, considering the inherent volatility and unpredictability of cryptocurrency markets. As Bitcoin continues to gain mainstream acceptance, its price in 2024 will undoubtedly be influenced by many factors.
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