Bitcoin is surging—what’s the prediction for crypto in 2024? – MoneySense

In Canada, spot bitcoin ETFs were approved in 2021. (The first North American bitcoin ETF, the Purpose Bitcoin ETF, launched in February 2021.) However, approval of these funds in the U.S. holds greater significance due to the larger market size and broader investor accessibility. It would also signal crypto’s continued progress towards mainstream acceptance.

Growing institutional interest in crypto

Bitcoin is gaining mainstream acceptance, as institutional investors continue to warm up to cryptocurrencies, particularly BTC and ethereum (ETH). Bitcoin’s limited supply, its upcoming halving event (expected in April 2024), and the possibility of a spot bitcoin ETF have further added to the digital currency’s allure for institutional investors, which have poured more than $1 billion into BTC this year.

Scarcity-seeking institutional investors are particularly enthused by the prospect of bitcoin halving, a process that halves the reward for mining, or validating, new blocks on bitcoin’s blockchain, thereby reducing the supply of the coin. A halving event happens once every four years and effectively makes the asset more attractive to investors.

Falling bond yields

Bitcoin’s fortunes are closely tied to U.S. bond yields. Bitcoin and bonds move in opposite directions due to their sensitivity to market sentiment regarding economic stability and inflation.

The inverse relationship means that at a time when bond yields are trending lower, bitcoin prices are ticking higher. However, when yields are rising, as they did in the first half of the year, investors have less incentive to chase returns from other assets, including cryptocurrencies and equities.

What to expect for bitcoin in 2024

Looking forward, the consensus among analysts is overwhelmingly positive for bitcoin. However, their degrees of optimism and price forecasts vary widely. Some crypto watchers are expecting the digital currency to return to its 2021 all-time-high price of more than $69,000. Considerably wilder predictions for 2024 call for bitcoin to hit $120,000 and even $250,000.

However, the usual warnings apply. Investors should proceed with cautious optimism. Any unforeseen geopolitical, financial or regulatory events could derail investor sentiment yet again and send bitcoin’s price tumbling, bringing with it the value of the broader crypto market. Crypto analysts remind investors that cryptocurrencies remain a risky bet.

If the short history of bitcoin has proved anything, it is that the digital coin’s value tends to be highly volatile, and its fluctuations can wipe out millions of dollars in minutes. As a digital asset, bitcoin also continues to exhibit sharp sensitivity to a host of factors including, but not limited to, geopolitical events, regulatory oversight, high-profile lawsuits, crypto scams and cybercrime. Investors seeking to gain bitcoin exposure should invest only what they can afford to lose. To borrow from a universally acknowledged gambling caveat: know your limit, play within it.