Bitcoin Bull Run 2024: Will BTC Scale New Heights?

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While Bitcoin’s (BTC) fourth halving is officially done and dusted, it was a bit of a non-event in terms of price movement.

BTC oscillated between $61,000 and $67,000 in the first ten days of the new halving cycle — but there is plenty to consider for the rest of the year.

Will Bitcoin’s shrinking supply support the ongoing Bitcoin bull run? Will more spot Bitcoin ETFs keep appearing? We answer all these questions and more.

Key Takeaways

  • BTC hit a new record high price of $73,750 on March 14, 2024.
  • Historical charts showed that BTC traded range bound for a couple of months following second and third halving events.
  • The interest rate outlook, the growth of Bitcoin DeFi, crypto regulations, and geopolitical tensions are expected to be key drivers of BTC prices in 2024.
  • Bitwise CIO said the market has underestimated long-term demand for Bitcoin and expects BTC to hit $250,000+ by the next BTC halving event in 2028.

Bitcoin Bull Run 2024: Positive Effects of Bitcoin Halving

On April 19, 2024, Bitcoin’s fourth halving saw block rewards cut by half from 6.25 BTC per block to 3.125 BTC per block. The event served as a timely reminder of Bitcoin’s inbuilt inflation-resistant properties and store-of-value status.

Bitcoin bulls have repeatedly pointed out that this halving cycle is different due to the cryptocurrency market’s growing maturity.

Switzerland-based crypto asset manager 21Shares in a report:

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“This Bitcoin halving comes in a different, more mature environment. It’s a historical moment for the industry; Bitcoin’s expanding use cases, strengthening its fundamentals in addition to the Bitcoin ETFs finally approved in the U.S. are all expected to pour in the favor of the largest cryptoasset.”

Why is Bitcoin Halving Different this Time Around?

Spot ETFs

The introduction of spot BTC ETFs in the U.S. in January 2024 was a game changer for BTC. Now, the tightened supply of BTC following the halving is expected to combine with sustained BTC ETF demand to support Bitcoin prices over 2024.

Matt Hougan, chief investment officer at spot BTC ETF issuer Bitwise, is one of the biggest Bitcoin bulls today.

In a report, Hougan said that the market has “underestimated” the long-term demand for Bitcoin.

“For instance, I don’t think the market fully appreciates the size of the opportunity in the ETF market once wirehouses and the rest of the roughly $60 trillion U.S. wealth management industry are able to allocate to Bitcoin ETFs, which could start to happen as early as Q3.

“I also don’t believe the market has fully factored in the extent to which rising concerns about inflation will drive significant allocations.”

On a similar note, 21Shares explained that registered investment advisors (RIA) are mandated to wait 90 days post-new product launches before investing.

The company added that “a mere 1% allocation to Bitcoin” of funds managed by RIAs in the U.S. “could trigger substantial inflows, nearly doubling its current market cap and resulting in a supply squeeze in the process.”

In Asia, Hong Kong regulators followed U.S. counterparts to approve a spot BTC ETF in the city state. More governments may follow suit in the coming months to provide investors with safe and easy access to Bitcoin.

Illiquid Supply

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. Since the start of November 2023, MicroStrategy has acquired over  0,000 BTC. The firm was the biggest corporate investor in Bitcoin, with a holding of 214,400 BTC worth $13.55 billion as of April 30, 2024.

21Shares noted a growing trend of increasing BTC supply held by long-term holders and decreasing BTC supply on exchanges, “reinforcing the case for an imminent supply shock.”

Data from Glassnode showed that long-term holder supply hit an all-time high (ATH) in December 2023 before retracting as investors booked profits as BTC climbed ATH of $73,750 on March 14, 2024.

Meanwhile, BTC supply in exchanges were at their lowest levels in nearly six years, as of April 30, 2024.

“If this trend persists, Bitcoin’s supply side will increasingly become illiquid, laying the groundwork for a supply squeeze and the potential onset of a parabolic bull run,” wrote 21Shares.

The Balance of Bitcoin on Exchanges
The Balance of Bitcoin on Exchanges. (Glassnode)
The total supply by BTC long-term holders
The total supply by BTC long-te m holders. (Glassnode)

Historical BTC Bull Cycle Movements

While past market performance is no guarantee of future returns, history often rhymes, and therefore, it is important to study historical BTC price movement, especially when past halving events have ushered Bitcoin bull runs within the next 12 to 18 months.

A look at historical BTC/USD charts showed Bitcoin price did not break out immediately after halving events. Following past halving cycles, Bitcoin has shown a tendency to trade range-bound during the early innings and exhibiting volatile market moves before breaking out into a bull run.

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 holdings to cover operational expenses. Therefore, the circulating market supply of BTC may not shrink immediately following the halving.

A 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) among investors.

Now let’s look at data from Glassnode to learn how BTC performed following past halving events:

  • First halving cycle (November 2012 – July 2016) – BTC posted a max return of +5315% and a max drawdown of -85%
  • Second halving cycle (July 2016 – May 2020) – BTC posted a max return of +1336% and a max drawdown of -83%
  • Third halving cycle (May 2020 – April 2024) – BTC posted a max return of +569% and a max drawdown of -77%

Glassnode said: “The price performance of Bitcoin across various halving epochs has a very wide spread, and we argue the earlier epochs are too different to today to be much of a guide. We do see both a diminishing returns and shallower total drawdown effect over time, which is a natural result of the growing market size and the scale of capital flows required to move it.”

Other Factors For a Bitcoin Bull Run in 2024

It is unwise to see the Bitcoin market from a one-dimensional viewpoint and solely focus on the effects of Bitcoin halving to predict a Bitcoin bull r n in 2024. Every market cycle is different, and there are undercurrents at play that we have to consider when analyzing market data.

What are various market catalysts in 2024 that could start or stop a Bitcoin b ll run?

1. Macroeconomics

The institutionalization of crypto over the last five years has made the crypto market sensitive to inflation data and the outlook for rate cuts.

As we saw in mid-April 2024, crypto prices fell in line with global equity markets, following hotter-than-expected U.S. inflation data that curtailed hopes of sharp rate cuts by the U.S. Federal Reserve.

The interest rate outlook will continue to be a key driver of crypto markets in 2024.

2. Bitcoin DeFi

The growth of decentralized finance (DeFi) on Bitcoin DeFi is a notable theme that many think will support a Bitcoin bull run in the near future.

Unlike other blockchains, Bitcoin does not support smart contracts, which limits its potential of hosting a DeFi ecosystem. Promising smart contract blockchains like Stacks (STX) and CoreDAO (CORE) are implementing unique designs to bring DEXes, crypto lending, staking, and cross-chain integrations to Bitcoin.

There are also a lot of expectations for Runes – an improved fungible token protocol for Bitcoin that launched on April 19, 2024, alongside the fourth Bitcoin halving event.

Crypto asset manager Franklin Templeton Digital Assets said that “a widely adopted fungible token standard is a prerequisite” to DeFi on Bitcoin.

Runes made a big impact on its debut. A spike in onchain activity due to Runes caused 24-hour Bitcoin mining revenue to rise to a record high of over $100 million on April 2, 2024.

3. Geopolitics

Due to its decentralized nature and store-of-value properties, investors see Bitcoin as a hedge against political events. Therefore, the ongoing wars in Eastern Europe and the Middle East could fuel BTC demand in 2024.

4. Regulations

Crypto regulations will continue to shape the crypto industry in 2024. Bitcoin is expected to weather any regulatory storm better than other cryptocurrencies due to its legitimization following the approval of spot BTC ETC in the U.S. More importantly, U.S. market regulator US SEC has labeled Bitcoin a “commodity” – a coveted label that only Bitcoin has received from the U.S. securities watchdog

Looking Forward: Bitcoin Outlook for 2028

In his weekly memo, Bitwise CIO penned his thoughts on five predictions to expect by the next Bitcoin halving in 2028.

  1. Bitcoin’s volatility will decline by 50% as the crypto gets more institutionalized  Emergence of spot BTC ETF is a primary driver for this case.
  2. As a result of lower volatility, investors will consider it “normal to have 5% or more of your portfolio in Bitcoin.”
  3. Spot BTC ETFs will draw over $200 billion in inflows.
  4. Central banks will add Bitcoin to their holdings.
  5. Bitcoin price prediction for 2028 is above $250,000.

The Bottom Line

We will end this article by reminding readers that financial markets are unpredictable. Experts can be wrong in their Bitcoin price predictions.

Therefore, it is important to do your own due diligence before investing and never invest more than what you can afford to lose. The chaotic price movements can humble even the smartest and most experienced players.

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Mensholong Lepcha
Crypto & Blockchain Writer
Mensholong Lepcha
Crypto & Blockchain Writer

Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to Capital.com, StockTwits, XBO, and other publications. He started his writing career at Reuters in 2017, covering global equity markets. In his free time, Mensholong loves watching football, finding new music, and buying BTC and ETH for his crypto portfolio.