The expectation of a Bitcoin bull market in 2024 continues to drive investment decisions across the industry. Several reasons were cited for the expected bull run, including the approval of spot Bitcoin ETFs for trading as well as the upcoming BTC halving. One analyst has reiterated the latter and explained why the halving will trigger a bull market.
The Bitcoin halving event will drive the market higher
Crypto analyst James van Straten took to X (formerly Twitter) to explain why the Bitcoin halving is bullish for the price. Now, the halving is an event that is scheduled to take place approximately every four years and the block rewards are halved each time.
This means that the number of BTC miners receive for mining a block is immediately reduced by 50%, drastically reducing the number of new coins coming into circulation. Currently the block reward is 6.25 BTC and will drop to 3.125 at the next halving.
Straten points to this reduction by using monthly issuance as a case study. He explains that a total of 61,000 BTC was accumulated by miners and exchanges last month. However, after the halving, the monthly issuance is expected to drop to 13,500 BTC and this drop is the largest.
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In the last 30 days, all included cohorts, miners and exchanges have accumulated 61,000 #Bitcoin.
When the monthly output is halved to 13,500 #Bitcoin in April.
If demand remains the same, it will exceed emissions by a factor of 4.
The market will most likely find a balance… https://t.co/FZOWsa8AGR pic.twitter.com/yn4lsF3cPG
— James Van Straten (@jvs_btc) February 6, 2024
As Straten points out, if demand remained at the same level at the time of the halving, demand would exceed supply by a factor of four. This will cause a shift in the market, which “will most likely have to find a higher equilibrium.” In other words, prices would have to rise to keep up with demand.
BTC price recovers from crash | Source: BTCUSD on Tradingview.com
Targets for BTC price in 2024
Another positive factor for Bitcoin price is that the halving year coincides with the presidential election in the United States. As Markus Thielen, Head of Research at Matrixport, pointed out in an analysis, this coincidence has always been bullish for the price.
The report points to the previous halving and election years in which the price of Bitcoin ended at high levels. In the last three halving years, BTC rose by 152% in 2012, 121% in 2016, and 302% in 2020, showing a consistent trend.
With 2024 being another halving and election year, the research analyst expects the price of Bitcoin to end the year at $70,000. This would represent a further 65% increase from current price levels and, if trends continue, the start of another bull market.
“Supported by the macroeconomic environment, monetary tailwinds, the US election cycle and gradually increasing demand from TradeFi investors investing in Bitcoin ETFs, a Bitcoin rally to 70,000 appears plausible,” said Thielen.
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