News
Bitcoin Price Prediction 2024 – Forbes Consultant
Editorial Note: We earn a commission from partner links on Forbes Advisor. Fees do not influence the opinions or ratings of our editors.
Since its inception in 2009, Bitcoin, the world’s oldest cryptocurrency, has attracted the attention of fans, investors, scammers and, most recently, regulators.
For many of its acolytes, bitcoin is not just a new form of currency, but an innovative technology that introduced the world to the concept of decentralized currencies and laid the foundation for an entirely new type of economy: the cryptocurrency market.
For others, it was a way to make a quick buck, and while some of these early investors managed to join the ranks of bitcoin millionaires, many others lost hundreds or even thousands of dollars trying to predict its price movements.
Bitcoin Price History
Bitcoin has been the subject of many price predictions, some of them extreme.
Notably, Cathie Wood, CEO of Ark Invest, predicted that bitcoin could reach an astonishing $1.48 million by 2030.
Of course, the world’s oldest cryptocurrency has come a long way since its first recorded price below a cent. In March 2024, BTC set a new all-time high in intraday trading by surpassing the $69,000 level and even surpassing $73,000 before falling in price.
Nicholas Sciberras, senior analyst at Collective Shift, points out that the idea that Bitcoin could one day be worth a million dollars per unit “really shows how far we’ve come.”
However, while big highs are possible, so are catastrophic lows.
On May 9, less than two months after hitting new highs for the first time in over two years, BTC was once again trading below $63,000.
How will Bitcoin perform in 2024?
Bitcoin’s performance in 2024 depends on a number of potential catalysts.
Numerous factors, such as institutional adoption, the latest halving, regulatory changes and macroeconomic trends, will influence the price of Bitcoin in 2024.
When it comes to predicting the future, there are two possible outcomes to consider: the bull case and the bear case.
The case of the bull
Sciberras sees the increased demand for block space on the Bitcoin network due to new “signups” as a positive development. Inscriptions are recent innovations on the bitcoin blockchain such as ordinals and BRC-20 tokens.
These signups could end up supporting the adoption of bitcoin’s Lightning Network, which enables faster transactions and could lead to bitcoin becoming more of a payment method rather than just a store of value.
“If bitcoin continues to make progress and be adopted on the payments front, it could increase its overall utility and become more like ‘money,’ helping it reach those lofty price targets,” adds Sciberras.
“We are seeing early signs of Lightning adoption. The Lightning Network’s total payments have grown 1,212% over the past two years. We’re also seeing Lightning overcome distribution hurdles with increased support.”
Interest rates and Bitcoin
US Federal Reserve Chair Jerome Powell indicated that the central bank may have reached the peak of its rate hike cycle, which Sciberras said could be a catalyst for a bitcoin rally in 2024.
However, after three meetings of the Federal Open Market Committee in 2024, the Fed has not yet decided to lower the rate Federal funds rate.
According to CME Group’s FedWatch tool, as of May 9, there is a 97% chance that there will be no rate cut at the Fed’s next meeting on June 11-12.
At the same time, CME Group predicts an 87% chance of an interest rate cut in September and a 100% chance of at least one rate cut before the end of the year.
Sciberras recommends investors keep an eye on core inflation Price index of personal consumption expenditureor core PCE, which is the Fed’s preferred measure of inflation. Powell left the door open for further rate hikes if core PCE starts to rise.
Bitcoin halving in 2024
A distinctive feature of bitcoin price history is the halving eventwhich occurs approximately every four years and reduces the rate at which new coins are created.
The last halving occurred on April 19thwhen the reward for mining a block of bitcoin dropped from 6.25 BTC per block to 3.125 BTC per block.
“We saw the price of bitcoin increase significantly one year before the halving and one year after,” Sciberras says.
Many investors consider the halving event to be one of the most significant factors influencing the price of bitcoin. However, Sciberras is cautious.
“It is not yet clear how much the halving is valued or how important the event is in the grand scheme of bitcoin’s price trajectory,” he says.
“There is a theory that the four-year halving event is not as significant as many think and that, instead, its alignment with external liquidity cycles is what makes it appear as a trigger for upward price movement .”
Institutional adoption
On January 10, the SEC approved 11 new ones Spot bitcoin ETFincluding applications submitted by financial giants BlackRock, WisdomTree and ARK. Spot bitcoin ETFs trade bitcoin at its current, or spot, price.
Before the SEC’s decision in January, the only Bitcoin ETFs approved for trading in the United States bitcoin futures. Futures are complex derivative instruments based on the future price of an asset.
Sciberras says the bitcoin spot ETF approval could be a key factor influencing the price of bitcoin in 2024. According to Sciberas, these approvals would not only require physical purchases of bitcoin, which would boost prices, but would also add considerable air of legitimacy to cryptocurrency in general. .
This appears to be exactly what happened. The price of Bitcoin skyrocketed to new all-time highs above $73,000 in the two months following the SEC’s announcement.
However, the excitement around spot bitcoin ETFs quickly faded. In May, the price of BTC had dropped below $63,000.
The case of the bear
Every investment has potential drawbacks, and bitcoin is no exception.
Sciberras says that on the downside of the ledger, there are concerns about the long-term security of Bitcoin, as the block reward will continue to decline.
Then there is the controversial debate over inscriptions on the bitcoin blockchain.
While Sciberras recognizes the potential for memberships to generate sustainable fees for the protocol in the long term, especially as more bitcoin circulates and miners’ reliance on fees increases, he also notes the differing opinions within the community regarding their impact on the functionality of the network.
Notably, one respected original bitcoin developer, Luke Dashjr, labels the signups as “spam.” He argues that they congest the network, complicating the mining process and overall network support. This difference in perspective sets the stage for a potential ideological clash within the bitcoin community.
Environmental considerations
Environmental impacts are another concern.
“There are ongoing attacks on the environmental impact of bitcoin, with the White House proposing a tax of up to 30% on bitcoin miners in the United States,” says Sciberras.
If bitcoin continues to be criticized for its energy consumption, it could threaten its price action.
“The worst case scenario is to see Europe try to reintroduce a ban [proof of work]which went to trial in 2022 but was quickly quashed.
Bitcoin uses a proof of work validation system. Proof of work, as opposed to test of the bet—is the most energy-intensive validation system that cryptocurrencies can use.
Political problems
A swing in sentiment towards bitcoin and the cryptocurrency by governments could also cause prices to fall.
“The United States is becoming incredibly hostile towards cryptocurrency and bitcoin,” says Sciberras.
Furthermore, if bitcoin threatens countries’ monetary monopolies due to its widespread adoption, governments might move to restrict it.
Sciberras points to a bill introduced in the United States to expand the Bank Secrecy Act and impose stricter reporting requirements for digital currency transactions, including those with unhosted wallets, as a cause for concern.
“In its current form, this legislation would cripple the U.S. cryptocurrency industry,” he says.
The implications of anti-money laundering, or AML, laws and Know Your Customer, or KYC, laws also worry investors. Sciberras identifies specific challenges related to applying high reporting requirements on transfers to self-hosted private wallets.
“Anti-money laundering laws remain a big battleground and could threaten the industry as compliance could be extremely difficult,” Sciberras says.
The best cryptocurrency exchanges of 2024
We’ve looked at major exchange offerings and reams of data to determine the best cryptocurrency exchanges.
Is Bitcoin a worthwhile investment?
Investing in bitcoin comes with its share of risks and rewards, and understanding them is key to making an informed decision.
“Looking to 2024 and beyond, I’m personally very bullish on bitcoin long-term,” says Sciberras, citing the macroeconomic backdrop, April’s halving event, and improved scalability development within the Lightning Network, as well as ETFs BTC commercials.
However, the future of bitcoin is not without potential obstacles.
“If Bitcoin continues to be targeted by governments and its energy consumption is further politicized, this could put pressure on Bitcoin’s long-term sustainability,” Sciberras says.
One of the main long-term concerns for Bitcoin is its safety in the face of a decreasing block reward.
“If bitcoin adoption and demand are poor, or if fee revenue is inadequate to incentivize miners to upgrade their hardware and mine new bitcoins, security could decline and threaten the network,” he says.