Bitcoin (BTC) is the most popular cryptocurrency worldwide. It has been through many boom and bust market cycles since its debut in 2009. Many wonder if they can expect significant growth in the BTC market in 2024; this article will answer this question.
What Is Bitcoin?
It is a decentralized digital currency designed to permit transactions outside the control of any centralized entity. It was built to remove the need for third parties to facilitate financial transactions.
Fiat money, e.g., the US Dollar, is the most common form of payment. Fiat currencies are centralized, i.e., controlled by a central authority, the government and the central bank. Bitcoin was designed as an alternative currency to allow people to transact outside government control. It also acts as a store of value.
This currency is decentralized, meaning there’s no one in charge, unlike fiat currencies, where central banks control the flow, and retail banks facilitate transactions.
BTC follows a 4-year cycle, which we’ll examine below.
What is the BTC “4-year cycle”?
The Bitcoin “4-year cycle” is a repeating pattern of Bitcoin’s price ticking up every four years after a halving event. To the unaware, a halving event is when the reward for BTC mining gets cut in half, as programmed in the original code to keep the token’s supply in check.
BTC has a maximum supply of 21 million, of which 19.5 million have already been mined. To control the supply and ensure people don’t mine the remaining Bitcoins in a short moment, the original creator wrote an algorithm to halve the reward allocated to BTC miners after every 210,000 blocks mined, which occurs every four years.
Bitcoin has been halved three times since its inception:
- From 50 to 25 BTC for each new mined block in November 2012.
- From 25 to 12.5 in July 2016.
- From 12.5 to 6.25 in May 2020.
The next halving is expected to take place in July 2024. If the 4-year cycle rings true, Bitcoin’s price might rise significantly after the halving.
Note that the correlation between halving and a price increase isn’t settled science. The theory is that Bitcoin’s price increases if demand stays the same and the pace of new token issuance cuts in half. But it’s not certain that the value increases shortly after a halving; it’s just how it has been before, such that people gave the correlation a unique name. Past performance is not a surefire predictor of future performance.
Other Factors Affecting BTC Price
Let’s examine other factors that affect Bitcoin’s value and whether they signal an increase in 2024.
Supply and Demand
Supply and demand is the primary determinant of the value of any type of asset, including cryptocurrencies. If more people find utility for this token, they’ll rush to buy it, spurring a price increase. If people find little utility, they’ll rush to sell their tokens, dampening the price.
Bitcoin is already the world’s most valuable cryptocurrency by market capitalization, having more demand than any other token. However, its price might stall if more use cases aren’t found.
Regulations significantly affect the price of Bitcoin. If governments clamp down on BTC transactions due to perceived violations, the general public will be wary of transacting with it, and the price will fall. Inversely, if governments enact friendly regulations, BTC will enter more into the mainstream, meaning higher prices.
Publicity drives a great deal of Bitcoin’s value. If BTC retains positive coverage in crypto news and media circles, people will be more willing to transact with it. However, if it gets bad news coverage, people will become wary, and existing holders will increasingly dump their tokens, depressing the price.
Past events signal that BTC will likely experience significant growth in 2024. There’s no guarantee of that happening, but investors could make substantial profits if the 4-year cycle repeats itself after the next halving.