Getting the Lay of the Land
To reach $100,000, Bitcoin would need to experience another 130% increase in value. Although this may seem like a substantial jump, it is well within the realm of possibility considering Bitcoin’s average yearly returns of 167%.
However, it’s important to take a comprehensive look at various factors and not solely rely on past performance. By analyzing data, recent trends, and historical patterns, we can gain a more accurate understanding of Bitcoin’s future trajectory.
The Effect of the Halving
As impressive as Bitcoin’s performance has been in 2023, it is essential to examine what lies ahead in 2024. The upcoming halving will significantly impact the dynamics of Bitcoin’s supply and demand.
Scheduled for April 2024, the halving will halve Bitcoin’s growth rate from around 1.7% to just 0.85%. While this may not immediately appear significant, previous halvings have led to substantial increases in Bitcoin’s price. On average, Bitcoin’s price has surged by approximately 128% during previous halvings as the growth of the total token supply becomes more constrained. If history repeats itself, a 128% increase from current prices would put Bitcoin just above $99,000.
Historically Low Supply
Apart from the halving’s impact, other developments in the Bitcoin universe contribute to the possibility of surpassing the $100,000 mark. One crucial factor is the existing supply crunch, which will be further amplified by the halving.
Over the last few years, investors have been accumulating Bitcoin at an unprecedented rate, leading to a historically low supply. The tradable supply has shrunk from a peak of nearly 3.2 million coins in March 2020 (before Bitcoin’s last halving) to the current level of 2.3 million tokens – a figure last seen in the spring of 2018. Consequently, the upcoming halving will be the first in Bitcoin’s history to occur with fewer coins on the market than during the previous halving.
New Game Changers Will Add Fresh Demand
The entry of deep-pocketed institutions into the Bitcoin market has long been anticipated. Major Wall Street players like BlackRock, Fidelity, and Franklin Templeton are eagerly awaiting approval to sponsor spot Bitcoin exchange-traded funds (ETFs). If given the green light by the Securities and Exchange Commission (SEC), these ETFs would pave the way for Bitcoin to be included in pensions, individual retirement accounts, and 401(k) savings accounts.
Previously, Bitcoin’s lack of functionality limited its usage primarily to a store of value or speculative investment. However, recent advancements, such as Layer-2 solutions, have expanded Bitcoin’s utility. It can now be utilized for minting non-fungible tokens (NFTs), participating in DeFi platforms, and serving as a reliable payment solution.
Considering the historically low supply combined with the impending halving, it is not far-fetched to believe that a $100,000 Bitcoin is feasible in 2024. As Bitcoin continues to surpass traditional barriers and integrate into the decentralized economy, its long-term value proposition becomes stronger. While it’s prudent to be conservative in projections, a price of $100,000 per Bitcoin in 2024 seems like a safe bet.