The Managing Director of Bitget, Gracy Chen, has made some predictions regarding the price trend of Bitcoin throughout this 2024.
The year has started off quite well, although the current price is slightly lower than at the end of December, and it is already possible to make some hypotheses about what could happen during the year.
Where is Bitcoin heading? Predictions for 2024
The question that Chen is trying to answer concerns the trend that the price of Bitcoin could have in the next 11 months of 2024.
Chen does not focus on the price, and its fluctuations, but on those events that could or should influence the price of BTC throughout the year.
In particular, it has identified some factors that will influence the future trends of Bitcoin in 2024 after the launch of BTC spot ETFs in the USA.
The next halving is approaching
Obviously we start with the halving, which will occur around April.
Chen emphasizes that the Bitcoin halving significantly affects the dynamics of BTC supply and demand.
On the contrary, it highlights that with the approval of ETFs, the demand for Bitcoin is expected to increase significantly throughout the year.
It should be remembered that halving the creation of new BTC given as a reward to miners inevitably reduces selling pressure, as miners have to sell a large portion of the BTC they earn to finance their significant expenses. By earning less, they will inevitably sell less.
However, if the buying pressure also decreases, the impact on the price could be irrelevant. But if the new ETFs generate an increase in demand for BTC in the markets, Chen predicts that the market could support a price rally after the April halving, but earlier compared to previous cycles.
The one in April 2024 will be the fourth halving in Bitcoin’s history.
The first one took place in November 2012, and at the beginning of 2013, the first major bull run in the history of BTC price was triggered.
The second one took place in July 2016, and it was not until January 2017 that we saw the start of the second major bull run.
The third event took place in May 2020, and the bull run started in November of the same year.
The hypothesis is therefore that, if the demand for BTC remains strong throughout 2024, a rally could start well before November.
However, it is not certain that the magnitude of this rally will be similar to those of the great bull runs of the past.
The monetary policy of the Federal Reserve
Another potentially decisive factor will be the monetary policy of the US central bank, namely the Federal Reserve (Fed).
Chen invites to monitor any changes in US monetary policy, and the timing of such changes, throughout 2024.
With a worsening of expectations for the US economy, analyses suggest a high probability that the Federal Reserve will start cutting rates, and that there will also be a decline in the yield of 10-year Treasury bonds.
Although the timing of all this is still unclear, the overall result should be positive for risk-on assets.
In addition, Chen also notes that the market capitalization of stablecoins has been growing overall for over a month, and usually this type of variation occurs later than market trends.
But there are also some factors directly related to the technology on which Bitcoin is based.
These are positive technological developments that lead to continuous prosperity in the Bitcoin ecosystem.
According to Chen, the sustained prosperity of the Bitcoin ecosystem, fueled by technological advancements, has laid the foundation for the importance of Bitcoin in 2023, as its value is gradually recognized by the market.
In particular, assets linked to the Ordinals protocol, such as BRC-20 and ARC-20, Realm, linked to the Atomicals protocol, and PIPE, require users to interact and carry out transactions using BTC. This inevitably increases the demand for BTC.
Will 2024 be the positive year for Bitcoin?
All of this, barring any unforeseen developments, could indeed allow 2024 to be a positive year for Bitcoin.
Although there are no real certainties about it, and there is always the risk of unexpected events, everything would suggest an increase in demand combined with a decrease in supply.
Moreover, even the sell the news triggered by the launch of the new Bitcoin spot ETFs on the US stock exchanges has shown that for now there doesn’t seem to be much room for a collapse, or at least for a truly significant decline.
However, it should not be forgotten that in the event of another black swan, like the one in March 2020, declines or even crashes are the norm for Bitcoin.