Riding the Wave: Unpacking Bitcoin’s Bombastic Potential in 2024 

Table of Contents

• Bitcoin ETF Advertisements To Be The Norm
• Upcoming Bitcoin Halving Expected To Be Groundbreaking 
• Interest Rate Cuts Poses Several Consequences 
• Possible Widespread Adoption By Central Banks Worldwide
• Parting Shot: Positives Lie Ahead for Bitcoin in 2024

2023 was tagged as one of the most turbulent years for cryptocurrencies. Despite this, the flagship cryptocurrency, Bitcoin, performed well, finishing the year with a value increment worth 154%. 

And guess what? This digital asset hasn’t completed its growth cycle. It is projected to continue its upward trend in 2024 due to the SEC’s approval of a spot Bitcoin ETF and Bitcoin halving event slated for April. Stay tuned to see why the events above and other reasons translate into a bombastic year for the pioneer cryptocurrency.

Bitcoin ETF Advertisements To Be The Norm

In 2023, Bitwise Asset Management released an introductory commercial themed around a spot Bitcoin ETF. The unveiling of this advert coincided with the timeline where rumors about the SEC approving a spot ETF were high-pitched. 

The advertisement gained instant traction as it featured Jonathan Goldsmith, the thespian hailed for his role as “The Most Interesting Man in the World” in ad campaigns for a reputable beer brand — Dos Equis. In the advert, Jonathan states unequivocally: “You know what’s interesting these days, Bitcoin.” This phrase inadvertently blurs the lines between his iconic character and the intriguing nature of Bitcoin. 

The chill advert becoming widespread placed Bitwise in the spotlight. For more context, the company ranked among firms awaiting spot Bitcoin ETF approval from the United States Securities and Exchange Commission. And with Bitwise having a storied history in ETF-related products and services (i.e., the Bitwise Bitcoin Strategy Optimum Roll ETF and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF), the advertisement’s closing stages project trust with the “ETFs backed by crypto specialists” tagline.

So, what does the Bitwise commercial tell us? Well, it points towards the fact that Bitcoin is enjoying rising interest and acceptance in mainstream finance. And with the SEC approving spot Bitcoin ETFs in January, you can expect to see a myriad of asset management entities (in Asia and the rest of the world) going all out to advertise these exchange-traded products in 2024, with the hopes of garnering as many investors and revenue as Bitwise has done. 

But with so many traditional asset managers joining in on the parade, there’ll be a substantial rise of fake crypto projects that’ll see people lose their money. Nonetheless, Bitcoin will rank as the most trusted cryptocurrency and a significant component in any investment portfolio.

Upcoming Bitcoin Halving Expected To Be Groundbreaking 

If you’ve got no idea what Bitcoin halving is, it’s a periodic scenario that occurs after the mining of the 210,000^th Bitcoin block. And since the mining rate for each block is approximately 10 minutes, mining 210,000 blocks takes four years. As such, Bitcoin halving happens once in four years.

But while we’ve gotten an idea of this event, what does the halving part of this terminology entail? It simply means the reduction of mining rewards by half. Therefore, the number of Bitcoin granted to miners upon transaction validation is slashed into two equal parts during Bitcoin halving, reducing the number of Bitcoin that go into circulation. The table below offers perspective on the last three Bitcoin halving cycles, alongside the mining rewards and Bitcoin value observable in each:

From the table above, you can see that Bitcoin’s halving cycles after 2012 showcased mind-boggling increments in the cryptocurrency’s peak price. 

The next Bitcoin halving event is slated for the 17^th of April, 2024. Considering the cryptocurrency’s all-time high values from previous episodes and that the SEC has approved spot Bitcoin ETFs, experts have predicted that Bitcoin could be valued at over $100,000 by June and hit a mind-boggling $200,000 by the end of 2024. Interesting times ahead! 

Investors are tipped to enjoy all the positives accompanying Bitcoin halving. Why? It’s an event curated to decrease supply and increase scarcity. When this happens, and the demand for Bitcoin remains unchanged or higher, the digital asset’s value rises, giving holders a genuine reason to head to the bank beaming with smiles.

Interest Rate Cuts Poses Several Consequences 

With central banks cutting interest rates, traditional investments such as savings accounts and bonds steadily lose appeal due to their decreased ROIs (Return on Investment). As such, investors will likely tilt towards alternative assets like Bitcoin due to their higher returns. With this scenario taking precedence, the demand for cryptocurrency and its value rises.

Another consequence of interest rate cuts is the weakening of fiat currencies. Reduced interest rates can undermine diverse Asian and European currencies, forcing investors to fund instruments deemed incentivizing in the long run. Since Bitcoin is a decentralized digital currency perceived to retain most of its value irrespective of economic downturns, the pioneer cryptocurrency will experience increased adoption and investments, propelling its value to greater heights.

But while interest rate cuts might be deemed positive for Bitcoin, they can facilitate short-term volatility. And since traders are bound to react to these cuts differently, uncertainty might reign supreme in the Bitcoin space, leading to upward or downward fluctuations.

Possible Widespread Adoption By Central Banks Worldwide

Central banks in over 100 jurisdictions are considering the adoption of digital currencies to boost the efficiency of payments and improve financial inclusion for their respective populations. In 2021, El Salvador became the first country to take a leap of faith and adopt Bitcoin as a legal tender. The government also released a financial application tagged the “Chivo Wallet,” which offers similar benefits to a CBDC (Central Bank Digital Currency), including the capability to facilitate transactions (deposits and withdrawals) in USD and Bitcoin. 

So, what nation will join El Salvador in adopting Bitcoin or another unique digital currency? While the US Federal Reserve isn’t giddy about launching its unique digital currency due to concerns regarding real-time operations, the European Central Bank and People’s Bank of China are laying the groundwork to launch a digital Euro and Yuan, respectively.

You might not find a link between Bitcoin and a digital currency released by, for example, the People’s Bank of China. Nonetheless, if a digital Yuan or Euro were to take precedence, it would most likely translate to an increased use of Blockchain technology. And since Bitcoin is part and parcel of this domain, the chances of its widespread adoption alongside digital currencies specific to other countries will increase exponentially.

On the flip side of proceedings, there have been whispers (at least, according to this tweet) that select Saudi Arabian and Qatari individuals want to purchase one million BTCs. If this happens, you can expect other financially buoyant nations to follow suit and make Bitcoin a significant part of their banking operations. Only time will tell!

Parting Shot: Positives Lie Ahead for Bitcoin in 2024

Although we’re only in the first quarter of 2024, events like the SEC approving a spot Bitcoin ETF, interest rate cuts, central bank adoption, and the Bitcoin halving event taking center stage later in April will most likely see the “gold standard” cryptocurrencies appreciate all through this year. 

But while the chatter around Bitcoin might seem optimistic for the most part, investors should remember that risks are constant. Since Bitcoin is a speculative digital asset with a decent amount of validity, it could have a tremendous or torrid year. So, before you make this financial instrument a component of your diversified portfolio, understand the risks involved and brace yourself for significant losses that might come along the way. Godspeed!