Bitcoin Bull Run 2024: What Does BTC Over $50K Mean?

Bitcoin (BTC) prices surged past the $50,000 mark for the first time in over two years in February to raise expectations for a crypto bull run in 2024.

The market conditions are looking primed, buoyed by the recent approval of BTC exchange-traded funds (ETFs), which has released pent-up institutional demand for the cryptocurrency.

Looking forward, the upcoming Bitcoin halving event due in April 2024 could further tighten supply-demand conditions to usher in a BTC bull run.

Key Takeaways

  • Bitcoin investors are accumulating coins in anticipation of the 2024 halving event, expected in April.
  • Bitcoin crosses $1 trillion marketcap for the first time since November 2021.
  • Historical charts showed that BTC traded rangebound for a couple of months following the second and third halving events.
  • Spot Bitcoin ETF drew net inflows of over $2.8 billion within one month since its launch.
  • What is the outlook across 2024 for Bitcoin and alts?

2024 could be the year when Bitcoin (BTC) leads the broader cryptocurrency market into another crypto bull market, especially with Bitcoin supply-demand conditions aligned to take advantage of the upcoming Bitcoin halving event due in April 2024.

It is already a year for short-term landmarks, with BTC crossing the $1 trillion market cap for the first time since November 2021, as reported by Reuters.

Looking ahead, we could see a scenario where BTC supply abruptly drops amid a surge of institutional demand due to two key events – Bitcoin’s fourth halving event and the potential approval of Bitcoin exchange-traded funds (ETFs).

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In this article, we will look at the possibility of a Bitcoin bull run purely from a supply-demand point of view for the cryptocurrency.

Will Shrinking Supply and Increased Demand Create a Bitcoin Bull Run 2024?

In this article, we will look at the possibility of a Bitcoin bull run purely from a supply-demand point of view for the cryptocurrency.

1. Bitcoin Halving

Sometime in April 2024, Bitcoin is expected to undergo its fourth halving cycle, after which the number of Bitcoins minted with each block will reduce by 50% from 6.25 BTC to 3.125 BTC.

Bear in mind that newly-minted coins first hit the coffers of Bitcoin miners. Bitcoin mining is a capital-intensive operation that forces miners to sell a chunk of their BTC income to cover operational expenses. Therefore, the market supply of BTC will not shrink immediately following the halving.

A look at historical BTC/USD charts showed that Bitcoin traded rangebound for a couple of months before breaking out into a bull run, following the second Bitcoin halving event in July 2016 and the third Bitcoin halving event in May 2020.

BTC Trading View
via TradingView

A similar brewing phase can be expected in 2024 when the mining community adjusts to the reduced mint supply, and periodic price spikes reignite the fear-of-missing-out (FOMO) feeling among investors.

2. Investor Accumulation

The present-day crypto market is more informed and prepared than it was in the lead-up to past halving events. It comes as no surprise that Bitcoin investors are accumulating coins to take advantage of the 2024 halving event.

In this regard, Michael Saylor and his publicly-listed firm, Microstrategy, are leading the way. The firm acquired an additional 16,130 BTC at an average price of $36,785 per BTC in November 2023. At the time of writing, Microstrategy held 174,530 BTC, accounting for nearly 0.9% of BTC’s circulating supply.

It’s not just the whales that are accumulating BTC. Blockchain data compiled by Glassnode suggested that wallets of all sizes are looking to HODL Bitcoin. According to a November 2023 report by Glassnode, long-term holders’ (wallets that hold BTC for over 155 days) supply is nearing an all-time high, while short-term holder supply is close to an all-time low.

However, readers have to be aware of “sell-the-news” market movements, which could occur once the excitement of the 2024 Bitcoin halving event peaks.

3. Spot BTC ETF Increases Institutional Investor Appetite for BTC

Yes, spot Bitcoin ETFs will make it easier and safer for retail investors to get exposure to BTC. But it’s the big fat cheques from traditional finance wealth management houses and investment banks that the crypto market is looking forward to.

Before the spot Bitcoin ETF, institutional investors did not have a safe, reliable, and regulated tool to access the Bitcoin market. They shied away from cryptocurrencies due to the lack of regulatory clarity, liquidity issues, and tracking inefficiencies.

Since the launch of spot BTC ETFs on 11 January 2024, the instrument has drawn net inflows of about $2.8 billion within a month, exceeding Bitcoin issuance of $1.25 billion during the period, data from crypto asset manager Coin Shares showed.

Institutional capital’s role in helping the crypto market hit record levels in November 2021 cannot be understated.

What Are Experts Saying About the 2024 Crypto Bull Run?

The price of Bitcoin above $50,000 has got everyone making crypto bull run predictions. Let’s hear what the experts have to say:

CoinShares

In its mid-February report, CoinShares said that Bitcoin’s 2024 halving event will decrease its annual inflation rate to less than 1%.

“If sustained, the current daily average net flow into US ETFs would be 4.6x Bitcoin’s average daily issuance after halving,” added CoinShares.

Grayscale

Michael Zhao, researcher at Grayscale Investments, cooled investor expectations in a February report, saying that “a Bitcoin price increase post-halving is not guaranteed.”

“Given the highly anticipated nature of these events, if a price surge were a certainty, rational investors would likely buy in advance, driving up the price before the halving occurs,” added Zhao.

Pantera Capital

In its 2024 Year Ahead report, Pantera Capital said crypto bull cycles have two phases — one where BTC tends to outperform the market in early crypto bull phases and one where altcoins outperform in later stages.

As of 14 February 2024, TradingView charts showed Bitcoin dominance plateauing at about 55% since late October 2023. Bitcoin dominance, which is the measure of BTC’s market cap to the overall market cap of cryptocurrencies, has been on the rise since hitting multi-year lows of about 40% in September 2023.

“While one of the highest sources of alpha has historically come from a perfectly timed rotation from Bitcoin into altcoins as phase 2 commences, that relationship won’t necessarily always hold true, nor is timing that rotation perfectly a reality for any trader,” said Pantera Capital.

The Bottom Line

Financial markets are unpredictable. The chaotic price movements can humble even the smartest and most experienced players. Always remember that crypto bull run and Bitcoin price predictions can be wrong. This article should not be considered investment advice and is for information purposes only. Always conduct your own diligence.

 

Invest only within your financial comfort zone, acknowledging the possibility of total loss. This investment carries a high risk, and you should be prepared for the absence of safeguards in adverse scenarios.
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Mensholong Lepcha

Mensholong Lepcha is a financial journalist specializing in cryptocurrencies and global equity markets. He has worked for reputed firms such as Reuters and Capital.com. Fascinated with blockchain technology, NFTs, and the contrarian school of investing, Mensholong has expertise in analyzing tokenomics, price movement, and technical details of Bitcoin, Ethereum, and other blockchain networks. He has also written articles on a wide range of financial topics including commodities, forex, central bank monetary policies, and other economic news.