Bitcoin price reached an all-time high of $73,315 on March 14. The market welcomed the new ATH after a prolonged bear market in 2022 and a majority in 2023. Bulls are finally taking charge, and the community is bracing for a positive chapter in 2024. 

Keeping its newfound momentum in mind, it is important to highlight that Bitcoin has changed significantly over the past couple of years. To understand and evaluate the direction forward, we need to identify BTC’s historical price action, an upcoming “supply” event and weigh the institutional landscape for the digital asset. 

Let’s get started.

What determines Bitcoin’s price?

As a cryptocurrency, Bitcoin has always been a volatile asset. It has battled different narratives over time, with popular maximalists terming it as a ‘medium of exchange’ or MoE. The narrative has deviated towards a ‘store of value’ or SoV recently, but its price remains subject to change based on the following factors:

• Supply and Demand: Bitcoin has a limited market supply of 21 million tokens which has increased at a slower rate over time. Currently, 19.6 million BTC has already been mined and the rest of the supply will take another 116 years. Therefore, an increase in demand immediately creates’ price appreciation.
• Market Sentiment: Bitcoin is a part of a new digital asset class. Hence, sentiment plays a huge role which depends on positive regulatory news, institutional adoption, wider retail involvement and improved security. 
• Macro-economic Market: Due to its volatility, BTC’s price is often influenced by inflation rates, interest spikes and the changing geopolitical landscape. Over time, the traditional financial market has both positively and negatively affected its value. 
• Competition: Bitcoin is not the only digital currency in the market, as other major assets such as Ethereum, Solana, Polygon, etc., offer other solutions. They have built their niche in the market, often taking market share from the largest digital asset. 

Why is Bitcoin price going up?

There is a popular saying in the financial market which goes like this, ‘history doesn’t repeat itself, but it often rhymes.’

Bitcoin is witnessing a similar situation right now. The crypto faced a prolonged bear market in 2022 and 2023. Now, in 2024, the market dynamics have changed for BTC, as new fundamental developments and impending catalysts are positively impacting its value. Let us break down the reasons: 

• Bitcoin Spot ETFs: On January 10, 2024, the U.S. Securities and Exchange Commission finally approved 11 spot Bitcoin exchange-traded funds or ETFs. This was a milestone achievement for BTC, and the asset has been on a tear since then. The total net asset value of all spot bitcoin ETFs is currently around $61 billion, which is around 5.5% of the entire BTC supply. This leads us to the next point. 
• Positive Correlation with the U.S dollar Treasury Yields: Back in February 2021, when DXY declined by 2%, Bitcoin registered a move above $50,000 for the first time. So there has always been a negative correlation between the dollar and Bitcoin. In 2024, the trend has diverted towards a more correlated move, with BTC moving with a resurgent dollar index. 
• Bitcoin Halving: A supply crunch event that is designed into Bitcoin’s network to fight inflation. Every four years, the block reward for BTC miners is halved, and 2024 marks the fourth halving event. The halving event has been a major catalyst for a new Bitcoin ATH. In light of that, let us analyse BTC’s historical price trend based on its past halvings.

Bitcoin Price Trends

Since 2012, Bitcoin has always witnessed a new all-time high after its halving event. After its first halving event in November 2012, BTC rallied by more than 8000%, reaching $1000 per BTC. 

Four years later, Bitcoin registered its second halving, and a year and a half later, BTC witnessed its first parabolic rally to $20,000 in 2017. This was the first bull run that caught the attention of the mainstream audience.

In 2020, during the pandemic, Bitcoin completed its third halving in May 2020. Despite the markets being in an economic turmoil. Bitcoin rallied strongly in 2021 to reach a new ATH at $69,000. 

The expectation for 2024 was similar. A large part of the community expected BTC to reach a new all-time high after its fourth halving, but weeks before the event, BTC witnessed a new market high. 

This particular trend highlights that Bitcoin is becoming more dynamic and robust as an asset class, becoming a more reliable investment with time. 

Bitcoin Price Prediction

2024 is turning out to be an exciting time for Bitcoin price discovery. 

As a result, multiple Bitcoin forecasts have been made by different institutions, individuals, and media outlets. The new all-time high of Bitcoin over the next 12-18 months is anyone’s guess. What we have witnessed over the past few halving cycles is that BTC increases in diminished ROIs. 

• After the first halving, BTC was up by +8000%.
• After the second halving, BTC rallied by +3000%. 
• The 3rd halving led to Bitcoin going up by 700%. 

This is relative to the increasing market cap. As the valuation and adoption increases, the percentage growth is relatively smaller than earlier. 

In light of that, the Cryptonary team has given their BTC prediction, which can be found in our 2024 projections report. 

How to Invest in Bitcoin

One of the major mistakes people make while investing in Bitcoin is that they remain reluctant to get started. They always want to buy lower, but the opportunity passes by, and then they are often sidelined. 

To tackle this situation, Dollar-cost averaging is a sound investment strategy. This plan involves buying BTC for a fixed amount at regular intervals, irrespective of the price. It is a low-stress investment outlook that allows you to plan your positions over the long term. 

Before beginning their DCA journey, the investor should keep three things in mind: 

• Budget
• Interval 
• Investing Platform

For example, if an investor had decided to invest $250 weekly for the past 432 days, i.e., since January 2023, their portfolio would have been up +125.13%.

Cryptonary’s Take

Bitcoin has experienced multiple highs and lows over the past decade. From battling regulations to proving its mettle in a challenging market, its rise to $73,315 is a significant victory for the digital asset industry. 

It is no longer a speculative asset or ‘magical internet money’. The approval of spot Bitcoin ETFs has solidified its importance in the larger financial landscape, and it is no longer on an arch to prove itself. 

In an ever-evolving digital economy, Bitcoin emerges as one of the cornerstone assets that deserves inclusion in long-term investment portfolios. The Cryptonary team believes in the future of Bitcoin, and with our dedicated research, analysis, and community support, we bring the best opportunity to all users. 

Bitcoin is the future, and the future is now. 

Cryptonary Out!