Bitcoin Price Prediction In 2024: Boom Or Bust?

Since its inception in 2009, Bitcoin, the world’s oldest cryptocurrency, has attracted the attention of fans, investors, scammers and more recently, regulators.

For many of its acolytes, Bitcoin is not just a new form of currency but a groundbreaking technology that introduced the world to the concept of decentralized currencies and established the bedrock 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 did manage to join the coterie of Bitcoin millionaires, many more lost hundreds or even thousands of dollars trying to predict its price movements.

Bitcoin’s 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 astounding $1.48 million by 2030. Senior analyst Nicholas Sciberras from Collective Shift points out that this prediction reflects widespread surprise at Bitcoin’s meteoric 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 has come a long way since its first recorded price of less than a cent. As of December 20, 2023, one Bitcoin was worth roughly $42,000. The idea that Bitcoin could one day be worth a million dollars per unit, as Sciberras points out, “really shows how far we’ve come”.

However, while great highs are possible, so too are catastrophic lows.

Forks

Bitcoin’s journey started in 2009, with the release of the Bitcoin white paper by creator Satoshi Nakamoto.

The early years of Bitcoin were marked by steady growth and periods of rapid price appreciation, known as “bull runs.” One of the greatest bull runs saw the price of BTC reach $69,000 in November 2021. However, there were also periods of uncertainty, as Sciberras points out.

“During 2014 and 2017 we saw many Bitcoin ‘forks’ proposed that split the Bitcoin community,” he says. Hard forks are changes to the underlying protocol of the blockchain network that split a cryptocurrency into two.

These forks represented crucial junctures in Bitcoin’s history, with various factions in the community attempting to change BTC’s direction. Despite heated debates, and a number of forks, Bitcoin has persisted 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.

“It has weathered many storms and attempts to change it, with Bitcoin forks now a distant memory, combining for less than 1% of Bitcoin’s total market cap.”

Bitcoin Halving

Another defining feature of Bitcoin’s price history is the halving event, which happens roughly every four years and reduces the rate at which new coins are created. The next halving is expected to occur 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.

Many investors view the halving event as one of the most significant factors that affects Bitcoin’s price. However, Sciberras is circumspect.

“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.

“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 like a trigger for upward price movement.”

How Will Bitcoin Perform in 2024?

Bitcoin’s performance in 2024 depends on a variety of potential bullish and bearish catalysts. Numerous factors, such as institutional adoption, the halving, regulatory changes and macroeconomic trends will influence the price of Bitcoin in 2024.

It should also be remembered that cryptocurrency, including Bitcoin, is extremely volatile, and predictions are therefore somewhat unreliable.

During 2023, the crypto industry was rocked by a series of enforcements that shook confidence in the sector. The U.S. Commodity Futures Trading Commission filed civil enforcement action against crypto exchange, Binance, and its founder and CEO Changpeng “CZ” Zhao.

However, in November, Binance settled with the U.S. Treasury and Department of Justice, with CZ agreeing to step down and hand over the reins as part of the deal.

Sciberras notes that, most importantly 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.

“Binance was a massive gray cloud hovering over crypto, and the settlement is a huge green flag heading into 2024.”

Interest Rates and Bitcoin

Chair of the U.S. Federal Reserve, Jerome Powell, has indicated that the central bank may have reached the peak of its rate hike cycle, which Sciberras thinks could be a catalyst for a Bitcoin rally in 2024.

When interest rates stabilize or fall, cryptocurrencies such as Bitcoin can offer an attractive place for investors to park capital due to its perceived hedge against traditional financial systems and increasing scarcity—especially as the halving approaches in May.

“Estimates forecast three 25-basis-point rate cuts in 2024, a more aggressive outlook than what they have previously signaled,” Sciberras says.

Sciberras recommends investors keep an eye on inflation from the personal consumption expenditures (PCE) price index, as Powell has left the door open for further rate rises if it begins to creep back up.

What Does the Future Hold for Bitcoin?

When it comes to predicting the future of Bitcoin, there are two potential outcomes to consider: the bull and the bear case.

The Bull Case

Sciberras says a bullish future for Bitcoin may depend on the sturdiness, 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.

“There were multiple bank failures in 2023, but many forget the underlying problem of these failures still exists.”

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.

“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.

Bitcoin Innovations

Sciberras also points to the increased demand for block space on Bitcoin’s network due to recent innovations, such as ordinals and BRC-20 tokens, as positive developments.

The higher demand, utility and fees for miners could help alleviate concerns over Bitcoin’s long-term security budget. The growing adoption of the Lightning Network, a layer on Bitcoin that enables faster transactions, could result in Bitcoin becoming more of a payment method rather than just a store of value.

“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.

“We are seeing early signs of Lightning adoption. Lightning Network’s total payments grew 1,212% over the past two years. We are also seeing Lightning overcoming distribution hurdles with increased support.”

Institutional Adoption

In June of 2023, BlackRock, the world’s largest asset manager, filed plans to start a spot exchange-traded fund…