Unveiling Bitcoin’s potential price surge to new highs.
Bitcoin, the pioneer of crypto, has captivated investors worldwide with its meteoric rise. As the most renowned digital asset, Bitcoin has consistently dominated the crypto market, boasting the highest market capitalisation compared to its counterparts.
With its recent surge in price, surpassing $72,200 in March 2024, the question on everyone’s mind is: Will Bitcoin hit the coveted $100,000 mark?
Factors Influencing Bitcoin Prices
What propels Bitcoin’s remarkable ascent? The answer encompasses a range of elements, from macroeconomics to market sentiment, demand and supply dynamics, and two pivotal developments
1. Approval of Bitcoin ETF by the SEC
After years of encountering obstacles, the U.S. Securities and Exchange Commission (SEC) has finally approved a spot Bitcoin exchange-traded fund (ETF). Approximately 11 ETF Bitcoin applications were approved by the SEC, including those from prominent entities such as BlackRock, Grayscale, and WisdomTree.
The ETF approval signifies a significant milestone, effectively granting Bitcoin the status of a regulated financial instrument akin to mutual funds. This move is poised to attract interest from traditional investors who may have previously been sceptical about the future of crypto. Bitcoin is poised to achieve greater mainstream recognition by integrating into larger financial instruments.
The crypto market surged into the green zone following the ETF’s approval, as per data from CoinMarketCap. Bitcoin witnessed a 1.34% increase, reaching US$46,462.95, with a weekly appreciation of 8.8%. Ethereum also experienced positive momentum, rising by 15.9% over the week.
Many investors think that the approval of spot ETF Bitcoin could enhance Bitcoin’s accessibility as an investment vehicle, attracting individuals previously deterred by the complexities of purchasing crypto.
2. The Bitcoin Halving
Every four years, Bitcoin undergoes a halving event, in which the number of new Bitcoins minted will be cut in half. This mechanism safeguards against inflation and upholds the fundamental scarcity that underpins Bitcoin’s intrinsic value.
The halving event renders Bitcoin scarcer, thereby driving its value upwards. Historically, Bitcoin has consistently experienced price surges following halving occurrences.
Consider the third halving in 2020 as a prime example which occurred on May 11, 2020. Before halving, Bitcoin’s price hit a low of US$3,858.00 on March 12, 2020. Five days before halving, it nearly tripled to US$10,000 on May 6, 2020.
Following the halving, Bitcoin’s price surged. By late July 2020, it had surpassed US$12,100. And by the end of 2020, Bitcoin had soared to over US$30,000 per Bitcoin, reaching nearly US$42,000 by January 2021.
As we anticipate the forthcoming fourth halving scheduled for April 2024, excitement permeates the crypto sphere. Will this event be the booster for Bitcoin’s ascent to US$100,000?
The Road to Six Figures
While one way to estimate future price changes is by considering previous Bitcoin price movements, it is crucial to remember the adage: Past performance does not guarantee future returns.
However, an interesting trend emerges when analysing Bitcoin’s historical annual returns. Observing the data reveals a pattern where Bitcoin’s significant upward surges tend to occur approximately once every three years. It is almost as if there is a cyclical rhythm ingrained within its market behaviour, akin to clockwork.
According to Forbes, Bitcoin’s value skyrocketed from around US$800 in January 2014 to over US$42,000 by January 2024, marking a staggering increase of more than 5,150% with an annual return of over 135% per year for the past decade.
If this growth rate persists, Bitcoin could reach US$98,700 by January 2025 and hit US$100,000 by February.
Bitcoin’s Journey
Since its first emergence in 2009 by Satoshi Nakamoto, the journey of Bitcoin has been a rollercoaster ride, marked by exhilarating highs and gut-wrenching lows. Yet, despite the turbulence, Bitcoin has emerged as a resilient and formidable investment asset, attracting both seasoned traders and newcomers alike.
Its decentralised nature and limited supply have positioned Bitcoin as a hedge against inflation and economic uncertainty, driving its appeal as a store of value in an increasingly digital world.
BlackRock, the world’s largest investment management company with US$9 trillion in assets under management, is now advocating for a Bitcoin ETF. Additionally, HSBC has begun allowing its customers to engage in Bitcoin and Ethereum ETF transactions.
In its early days, the value of Bitcoin was relatively low. In 2010, Laszlo Hanyecz used 10,000 Bitcoins to purchase two Papa John’s pizzas in Florida. Fast forward to the end of March 2024, and the price of a single Bitcoin has soared to US$69,000 which means if Hanyecz still has his Bitcoins, it will be worth more than US$690 million!
Should You Invest in Bitcoin?
One compelling reason is that Bitcoin ranks as the 9th most valuable asset globally. While we cannot predict Bitcoin’s future price with certainty, we can draw insights from many institutional investors who see Bitcoin as a future asset.
Another crucial factor to consider is Bitcoin’s limited supply, capped at 21 million coins, with no possibility of increase or decrease. Typically, in scenarios where goods are scarce, demand tends to rise while supply dwindles, resulting in higher prices.
However, it is paramount to emphasise the importance of conducting independent research and understanding your chosen investment asset’s background, risks, and profit potential.
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