Key points
- Bitcoin has plenty of bullish momentum in 2024.
- The SEC approved the first spot bitcoin ETFs in January 2024.
- The original crypto is on track for its next halving in April 2024.
Bitcoin investor sentiment could not be better in 2024 following the highly anticipated approval and launch of the first wave of spot bitcoin exchange-traded funds.
Early demand for spot bitcoin ETFs suggests significant institutional interest in crypto that could propel bitcoin prices to new highs in the first half of 2024.
Will bitcoin rise in 2024?
Likely, the largest bitcoin market catalyst for 2024 took place just 10 days into the year. In January 2024, the U.S. Securities and Exchange Commission approved several spot bitcoin ETFs following years of repeated rejections.
U.S. investors have had access to bitcoin ETFs that hold futures contracts since late 2021, but the new spot bitcoin funds are the first to invest in the cryptocurrency itself rather than derivative contracts.
The following 11 SEC-approved spot bitcoin ETFs began trading on Jan. 11, 2024:
- ARK 21Shares Bitcoin ETF (ARKB).
- Bitwise Bitcoin ETP Trust (BITB).
- Fidelity Wise Origin Bitcoin Fund (FBTC).
- Franklin Bitcoin ETF (EZBC).
- Grayscale Bitcoin Trust (GBTC).
- Hashdex Bitcoin ETF (DEFI).
- Invesco Galaxy Bitcoin ETF (BTCO).
- iShares Bitcoin Trust (IBIT).
- Valkyrie Bitcoin Fund (BRRR).
- VanEck Bitcoin Trust (HODL).
- WisdomTree Bitcoin Trust (BTCW).
Bitcoin bulls have long believed SEC-approved spot bitcoin ETFs would make it easier for institutional and retail investors to access bitcoin, potentially opening the floodgates for cryptocurrency to become a mainstream asset class. In fact, bitcoin prices soared following the launch of the new ETFs, suggesting this thesis may be playing out as anticipated.
“There’s already massive demand for bitcoin now, and these BTC ETFs are only in their early stages,” said Brian D. Evans, CEO and founder of BDE Ventures. “Maybe it won’t have the parabolic trajectory it had over the last few years, but the trend is still looking very much up and to the right.”
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Bitcoin price history
Bitcoin began trading on online exchanges in 2010 and crossed over a dollar in value for the first time in April 2011.
As its popularity and visibility rose, bitcoin’s volatility and unique blockchain-based design gained the attention of investors and tech enthusiasts alike. Bitcoin prices reached $1,000 for the first time in 2013. But crypto garnered significant mainstream awareness when its prices surged to nearly $20,000 in December 2017.
One of the biggest driving forces behind the 2017 crypto bubble was CME Group’s decision to launch crypto futures contracts in late 2017, a mainstream financial institution’s first bitcoin-related financial products.
After the crypto market frenzy died down in 2018, bitcoin prices plummeted to less than $4,000.
When stock and crypto trading became trendy again during the COVID-19 pandemic in late 2020, bitcoin prices again soared to new all-time highs. Following a string of bitcoin futures ETF launches in late 2020, bitcoin hit $69,000 in November 2021.
Rising interest rates triggered a sell-off in bitcoin and other risk assets in 2022, and bitcoin prices dropped nearly 65% that year. The sell-off was further compounded by Luna and its associated stablecoin terraUSD’s collapse in May 2022 and multiple crypto firm bankruptcies.
Monetary policy tightening reined in inflation throughout 2023, and investor appetite for crypto has returned.
While bitcoin hit its 2022 bottom at less than $16,000 in November, the original crypto reached more than $20,000 by January 2023.
Bitcoin prices remained remarkably resilient even as crypto-focused banks Silvergate Bank and Signature Bank collapsed during a U.S. regional banking crisis in early 2023.
Fears over crypto market contagion died following the banking crisis, and investors shifted their focus from 2022’s crypto winter to the possibility that the SEC could soon approve the first spot bitcoin ETF.
Bitcoin investor sentiment is bullish and pricing momentum is positive in early 2024. But longtime crypto investors know gains and losses can go as quickly as they come. The last time bitcoin completed a calendar year with a gain or loss of less than 60% was in 2015.
Bitcoin price stats
| Bitcoin stats | Price |
|---|---|
52-week low | $24,780.17 |
52-week high | $73,835.57 |
All-time high | $73,835.57 |
Bitcoin prices are up more than 130% year over year, as of April 11. Bitcoin hit its all-time high of $73,835.57 on March 14.
Bitcoin predictions
Bitcoin price movements are notoriously difficult to predict, especially over weeks or months at a time. But momentum seems bullish in 2024, and there is evidence the bitcoin rally still has legs.
Bitcoin stock-to-flow
One model used to predict bitcoin’s price movement is stock-to-flow. It’s a methodology typically used to value commodities.
In stock-to-flow, a commodity’s stock is its total existing supply and its flow is the total new supply created in a year. Because bitcoin’s new supply is constant regardless of the price of the asset or its market demand, stock-to-flow has been used by some investors to predict future prices.
Currently, bitcoin’s stock-to-flow ratio is about 53.9, slightly below gold’s 62.3 ratio, assuming 3,000 tonnes of gold is mined annually. Bitcoin is uniquely designed for its flow to decrease as more bitcoins are mined and as the original coin periodically undergoes so-called halvings.
As bitcoin’s flow drops, its stock-to-flow ratio rises. Some investors have used bitcoin’s historical stock-to-flow ratio as a model for its future price.
But the model has its shortcomings. For example, stock-to-flow does not consider basic pricing factors, such as investor demand, macroeconomic conditions or regulatory restrictions. As a result, bitcoin prices plummeted in 2022 after the stock-to-flow model predicted prices would hit $100,000.
Bitcoin futures
Bitcoin bulls who are confident the crypto is headed higher can leverage their bets by buying bitcoin futures contracts.
Futures contracts are agreements to buy or sell an asset at a specific price at a future date, and they can provide a high degree of leverage that can supercharge investor returns. But that leverage could also add a layer of risk on top of an already volatile, high-risk investment like bitcoin.
Bitcoin traders can also use the bitcoin futures market as an indicator of when to buy and sell the cryptocurrency. Historically, spikes in the open interest in CME’s standard bitcoin futures contract have corresponded to tops or bottoms in bitcoin prices.
Will bitcoin reach $100,000?
Many experts believe it’s only a matter of time before bitcoin sets new all-time highs on its path to $100,000.
The next potential catalyst for bitcoin’s 2024 performance will be its halving event, expected in mid-April.
Halving is intended to maintain the scarcity of bitcoin and support its price. Bitcoin halving is the process by which bitcoin cuts the rewards paid out to miners for each block of transactions added to the blockchain.
A halving occurs after every 210,000 blocks on the bitcoin blockchain, roughly once every four years. Bitcoin miners currently earn 6.25 BTC in rewards per block. But that reward will be cut to 3.125 BTC starting at block 740,000.
Historically, bitcoin prices have reached a cyclical bottom a little over a year before a halving and have rallied for more than a year following a halving. If bitcoin were to repeat this trend in 2024, its price could reach $148,000 by the first half of 2025.
Bitcoin can be an incredibly unpredictable asset, so it’s difficult to predict whether it could hit $100,000 at any given time.
“That said, clearly the momentum for Bitcoin and the rest of the digital asset market is looking stronger and stronger by the day,” said Lucas Lu, CEO of Bytetrade Lab.
Plus, investing in bitcoin has also become more accessible, further bolstering BTC prices.
“Adoption is also becoming more robust, with BTC ETFs now enabling a large number of investors to get exposure in an easy manner,” Lu added.
Should you buy bitcoin?
Bitcoin can be an appropriate investment for short-term traders looking to speculate on a volatile asset or long-term investors with extreme tolerance for risk and volatility. But bitcoin has an unproven long-term track record relative to commodities like gold and silver.
Leo Mizuhara, CEO of Hashnote, said investors shouldn’t be focused on where bitcoin’s price is headed in 2024.
“It’s anyone’s guess, but clearly, cryptocurrency adoption is growing as a whole. There are good catalysts like these BTC ETFs and the approaching halving, and Bitcoin doubling in a year is not uncommon,” Mizuhara said.
Instead of trying to time the bitcoin market in the short term, investors should consider cryptocurrency as a long-term investment that can diversify a portfolio.
Frequently asked questions (FAQs)
Because bitcoin has a fixed supply, does not generate cash flow, revenue or earnings, and is not backed by an asset that holds intrinsic value, its price is determined largely by investor sentiment and demand.
If bitcoin’s popularity and demand continue to rise over time, nothing is stopping its price from hitting $1 million. But it’s extremely difficult to predict investor sentiment and long-term future demand.
Bitcoin halving is the process by which bitcoin automatically cuts rewards for mining a single block of transactions in half.
Halvings occur every time another 210,000 blocks are added to the blockchain, and the next halving event, expected in April 2024, will cut mining rewards from 6.25 BTC per block to 3.125 BTC per block.
The range of bitcoin price targets is extremely wide because there is no clear way to value bitcoin accurately from a fundamental perspective.
Several high-profile bitcoin skeptics, such as recently deceased Berkshire Hathaway vice chairman Charlie Munger, economist and professor of applied economics at Johns Hopkins University Steve Hanke, and Nobel Prize-winning economist Paul Krugman, still believe the cryptocurrency is inherently worthless and predict its price could ultimately fall to near zero.
