Is Bitcoin On Track to Make a Big Move and Hit $100,000 in 2024?

The recent halving should benefit Bitcoin’s price, as its inflation rate now sits below 1%. The added effect of spot Bitcoin ETFs should place additional pressure on Bitcoin’s supply.

Measuring the Effect of the Halving

Any prediction like this is inherently speculative. But a bit of speculation can be healthy and force us to evaluate an investment’s long-term developments.

To forecast Bitcoin’s performance, it’s imperative to consider the trends around the halving. The halving is a pre-programmed event that occurs approximately every four years. It reduces the reward for mining new blocks by half and forms the foundation of Bitcoin’s robust monetary policy.

The halving event reduces the reward for mining new blocks by half.

This mechanism effectively decreases the rate at which new bitcoins are created over time, contributing to Bitcoin’s scarcity and, historically, its price appreciation. Bitcoin recently underwent its fourth halving in April 2024, sending its inflation rate to just 0.85%.

Due to the clear influence the halving has on dynamics around Bitcoin’s supply and demand, we can form our projection around it by looking back at previous halvings. In the year Bitcoin undergoes a halving, its price increases by around 125% on average. If we measure from its price at the beginning of the year ($44,000), a 125% increase would put its price at $99,000.

A New Variable to Account For

If this halving has a similar effect to past ones, it appears that Bitcoin should be within striking distance of the $100,000 mark in 2024. But to add more certainty to 2024 being the year Bitcoin hits six figures, there is one other variable we need to consider.

Unlike past halving cycles, this one has a new factor that could prove to be the extra push the cryptocurrency needs to surpass $100,000: Spot Bitcoin ETFs. For most of Bitcoin’s history, its rise was primarily driven by retail investors like you and me. But with spot Bitcoin ETFs, deep-pocketed institutional investors can start accumulating Bitcoin without regulatory or custodial concerns.

Institutional investors can now accumulate Bitcoin through spot ETFs.

The arrival of institutions, along with expanding access to retail investors who may have previously been uncomfortable buying Bitcoin off a crypto exchange, should place additional pressure on Bitcoin’s supply. In fact, we are already seeing the net effect of this new Bitcoin exposure vehicle.

In February, the ETFs were buying 10 times the daily production rate of Bitcoin (roughly 900 bitcoins per day), helping to push its price to a new all-time high. While the rate of buying has since cooled, it is likely safe to say that we are only seeing the tip of the iceberg. Of more importance, though, if buying were to return to these levels, the ETFs would be outdoing Bitcoin’s daily supply at 20 times the rate due to the halving now passed.

The Bottom Line

2024 is shaping up to be the year that Bitcoin reaches $100,000. With its price sitting near $70,500 today, that presents a noteworthy opportunity with a nice 40% gain.

Whether it happens this year or next, one thing is clear: ongoing halvings, growing adoption, and institutional involvement make a strong case for Bitcoin to keep surprising us for years to come.