Bitcoin Bull Run 2024: FUD Looms as Mt. Gox prepares BTC Release

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2024 has been a historic year for Bitcoin (BTC).

Bitcoin finally got approval for much-coveted exchange traded funds (ETF) in January. The bellwether cryptocurrency then went on to scale new all-time highs of over $73,000 in March. In April, Bitcoin completed its fourth halving cycle.

At the time of writing, in late June 2024, the Bitcoin market fever looks to have cooled. The crypto fell below the $60,000 mark during the month as spot BTC ETF outflows increased, and the reported selling of confiscated BTC by the German government sent a bearish wave across the industry.

Now, the planned repayment of nearly $9 billion worth of BTC to customers of defunct Tokyo-based exchange Mt. Gox has added an air of uncertainty to the market.

Can Bitcoin reignite its 2024 bull run in the second half of the year? Let’s find out.

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.
  • Interest rate outlook, 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.
  •  Mt. Gox looks to repay billions of dollars worth of Bitcoin to customers in early July 2024.

Bitcoin Bull Run 2024: Positive Effects of Bitcoin Halving

Let’s begin with the positive developments that we have seen so far in 2024.

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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 signaled a new era for Bitcoin, saying:

“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.”

Bitcoin Bull Run 2024: Spot BTC ETFs Changes Everything

The introduction of spot BTC ETFs in the US 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 after new product launches before investing.

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

Bitcoin Bull Run 2024: Selling Pressures

The recent drawback in BTC prices can be mainly attributed to three key factors:

  1. BTC ETF outflows – Spot BTC ETFs saw two straight weeks of outflows in June 2024 causing BTC prices to fall to a 8-week low of $58,414. According to crypto asset management firm CoinShares, “pessimism amongst investors for interest rate cuts” was the main reason for the outflows. We have to keep in mind that the spot BTC ETFs have made Bitcoin sensitive to macroeconomic forces.
  1. German government dumps Bitcoin – On June 18, 2024, onchain data compiled by Arkham Intelligence showed a wallet identified as belonging to the German Government conducting test transactions to centralized exchanges (CEXs) Coinbase and Kraken. A day later, the wallet sent 500 BTC each to Coinbase, Kraken and Bitstamp, possibly dumping BTC worth $92.3 million in the open market. Onchain showed an additional 850 BTC (worth $52.3 million) being sent to the CEXs over the next eight days.
  1. Mt. Gox repayments – Investors are expecting a bearish wave to hit the crypto market as defunct Tokyo-based exchange Mt. Gox looks to repay billions of dollars worth of Bitcoin to customers in early July 2024. According to Arkham Intelligence, Mt. Gox holds $8.74 billion worth of BTC. It remains to be seen how many customers will sell the BTC that they lost to a hack ten years ago in early 2014.

Bitcoin Bull Run 2024: Future Catalysts

In this section, we look at catalysts that could reignite or dent the Bitcoin bull run of 2024.

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 US inflation data that curtailed hopes of sharp rate cuts by the US Federal Reserve.

Interest rate outlook is continuing 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.

Bitcoin has also seen the introduction of token standards such as Runes and Ordinals, which has sparked a “DeFi Summer” movement in the oldest crypto network in the world.

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 US.

More importantly, US market regulator US SEC has labelled Bitcoin a “commodity” – a coveted label that only Bitcoin has received from the US securities watchdog

Looking back: 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 that Bitcoin’s 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 exhibit 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.”

Looking Forward: Bitcoin Outlook for 2028

In one of his weekly memos in April, Bitwise CIO Matt Hougan 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. The 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 in over $200 billion.
  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 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.