Will Bitcoin rise or fall in 2024?

Bitcoin Forks and Halving

November 2021, Max During one of the bull markets, the price of Bitcoin reached $69,000.

But between 2014 and 2017, Bitcoin went through several hard forks, with various factions in the community trying to change the direction of Bitcoin. Despite intense debate and multiple forks, Bitcoin remains strong today, with the combined market value of forked coins less than 1% of Bitcoin’s total market value.

Another landmark node in Bitcoin price history is the halving event, which occurs approximately every four years and reduces the rate at which new Bitcoins are mined. The next halving is expected to be around May 2024.

Many investors regard the halving event as one of the most important factors affecting the price of Bitcoin. However, the extent and extent of the impact of halving on prices has not yet been determined.

What will be the trend of Bitcoin in 2024?

Bitcoin’s performance in 2024 depends on a variety of potential bullish and bearish catalysts, including institutional adoption, halving, regulatory changes, and macroeconomics trends and many other factors.

In 2023, a series of regulatory enforcement measures shook some investors’ confidence in the industry. The U.S. Commodity Futures Trading Commission has filed a civil enforcement action against crypto trading platform Binance and its founder and CEO Changpeng “CZ” Zhao. In November, Binance reached a settlement with the U.S. Treasury Department and the Department of Justice. As part of the settlement agreement, CZ agreed to resign and hand over management rights.

Binance has not been accused of misusing customer funds, and no runs have occurred on the trading platform. This is one of the best outcomes the market could hope for, and crypto asset prices rise as a result.

The Binance incident is like a huge dark cloud hovering over crypto assets, and the final settlement agreement is like a huge green flag, sweeping away the haze before 2024.

Interest rates and Bitcoin

Federal Reserve Chairman Powell said, The Federal Reserve may have reached the peak of its rate hike cycle, which Sciberras believes could be the catalyst for a Bitcoin rally in 2024.

When interest rates are stable or falling, cryptoassets such as Bitcoin become more attractive to investors because of the widespread belief that Bitcoin can serve as a hedge against the traditional financial system. And its scarcity is increasing, especially as the halving approaches this May.

Investors are advised to pay attention to the inflation index in the personal consumption expenditures (PCE) price index, as Powell did not rule out the possibility of further interest rate hikes if inflation starts to pick up. .

Where will Bitcoin go?

To predict the future of Bitcoin, two possible scenarios need to be considered: bull market and bear market.

Bull Market

Whether Bitcoin’s future is optimistic may depend on the strength of the traditional banking framework.

There are serious problems in the global economy, and the United States is facing a banking crisis and a growing debt burden. Many banks failed in 2023, but many people forgot that the underlying problems that caused the failures still exist.

If banks continue to fail in 2024, the government may be forced to step in to provide stimulus or print more money, causing the dollar to continue to depreciate.

In this case, Bitcoin, as a known fair and flexible asset with a fixed total supply and relatively stable game rules, may become more Attractive.

Bitcoin Innovation

We can see some positives Development activity, demand for block space on the Bitcoin network continues to increase due to recent innovations such as the Ordinals protocol and BRC-20.

Higher demand, utility and fees from miners may help ease concerns about Bitcoin's long-term security budget. Beyond the recognition of Bitcoin as a traditional store of value, the growing popularity of the Lightning Network, which enables faster transactions, may accelerate the wider adoption of Bitcoin payments.

If Bitcoin can continue to make progress and expand its use in payments, it could increase its overall utility — which could also help push prices to new highs.

The current application of Lightning Network is still in its early stages. Total payment volume on the Lightning Network has grown by 1,212% over the past two years. We also observed that the Lightning Network overcomes distribution challenges by adding support.

Admission of traditional institutions

June 2023, BlackRock, the world’s largest asset manager, has submitted plans to launch a Bitcoin spot trading platform exchange-traded fund (ETF). Many other institutions followed suit, with WisdomTree, ARK Invest and others submitting first-time applications or updating existing applications shortly after BlackRock announced the news.

The move pushed Bitcoin prices to a high of nearly $45,000 in December 2023.

Currently, the SEC has received nearly 10 applications, and the final results of the applications will be announced soon. On January 10, 2024, the SEC will decide whether BlackRock’s application is passed.

The approval of the spot Bitcoin ETF is a key factor affecting the price of Bitcoin in 2024. Because spot ETF trading not only requires the actual purchase of Bitcoin (thus potentially driving up the price), but it also significantly increases the legitimacy of the crypto asset.

Bear market?

On the negative side, there are concerns about the long-term security of Bitcoin, given that block rewards will continue to decrease. In addition, if the spot Bitcoin ETF application is rejected, it will also bring potential risks, resulting in short-term selling of Bitcoin.

The second is the controversial discussion about "inscriptions" on the Bitcoin blockchain, especially as more Bitcoins circulate and miners become increasingly concerned about fees. With increased reliance, Inscription has the potential to generate fees for the protocol in the long term, but there is also disagreement within the community about the impact of Inscription on the functionality of the network.

Luke Dashjr, a well-respected original Bitcoin developer, labeled the inscription as "spam." In his view, they clog the network, complicating the mining process and overall support of the network. This difference in perspective highlights an underlying ideological conflict within the Bitcoin community.

Environmental impact

Bitcoin continues to have an impact on the environment After being criticized, the White House proposed to impose a tax of up to 30% on Bitcoin miners in the United States.

If Bitcoin continues to be criticized for its energy consumption, it could threaten its price movement.

Policy Issues

Policy for Bitcoin and Crypto-Assets Attitudinal swings may also lead to price declines.

A phenomenon worthy of attention: A recently proposed bill in the United States expands the Bank Secrecy Act and imposes restrictions on digital asset transactions (including transactions in non-custodial wallets) ) imposes stricter reporting requirements. In its current form, this legislation will cripple the U.S. crypto-asset industry.

The impact of anti-money laundering (AML) and know-your-customer (KYC) laws is also worrying investors. Anti-money laundering laws remain a huge challenge that could threaten the industry as compliance can be extremely difficult.

Is Bitcoin worth investing in?

Investing in Bitcoin comes with both risks and benefits, and understanding these is the key to investing wisely.

Overall, the future of Bitcoin is full of expectations.

We can actively focus on the macroeconomic background, the upcoming May halving, improved scalability within the Lightning Network, and a possible BTC ETF.

However, the future of Bitcoin still faces many challenges. Regulatory policies, energy issues and security issues in the face of reduced block rewards are still issues that require attention for the long-term sustainable development of Bitcoin.