Is the current moment opportune to invest in Bitcoin?
2023 proved to be a year of recovery from the bear market that plagued the cryptocurrency world in 2022. Cryptocurrency, specifically Bitcoin, has made a strong comeback and the recent rally in 2024 is evidence of this. In March, Bitcoin reached its highest value ever, surging to $73,750. Analysts predict that this growth will continue throughout the year, especially with the Bitcoin halving event scheduled for April 2024.
Bitcoin’s price has quadrupled since January 2023, and this can be attributed to the anticipation surrounding two major events in 2024: the approval of spot Bitcoin ETFs by the U.S SEC and the Bitcoin halving. Just a month after the news of ETF approval, BTC surpassed $50,000, a value that hadn’t been seen since 2021. Currently, prices are at a new all-time high, hovering around $70,000.
The Bitcoin halving occurs every four years, reducing the number of coins awarded to miners by half. Since 2020, miners have received 6.25 BTC for solving a problem, but during the next halving in 2024, they will only receive 3.125 BTC. With Bitcoin’s price soaring and the halving approaching, many experts believe that now is a great time to invest in Bitcoin.
Looking back at the last halving event in 2020, the token’s price skyrocketed from around $7,194 to $32,810. Experts are optimistic about the demand for Bitcoin in 2024. Martin Leinweber, a digital asset product strategist, has noted that the demand for Bitcoin has already surpassed the available supply. A wider range of investors are allocating a portion of their assets to Bitcoin. With the halving causing a 50% reduction in the production of new Bitcoin, the demand is likely to increase further. While prices may experience an obvious uptrend, investors should not expect guaranteed astronomical gains.
Dan Weiskopf, co-portfolio manager of Amplify’s Transformational Data Sharing ETF, warns that investing in Bitcoin just before the halving carries risks of volatility. He believes that the momentum generated by recent Bitcoin ETF approvals will continue to drive prices up before the halving, but investors should remain patient and expect fluctuations.
As of now, Bitcoin is trading around $65,151, experiencing a 6.5% drop in a single hour. Despite being down 7% in April, a retest of support has had a calming effect on the overheated market. A recent liquidation event totaling $400 million for Bitcoin and altcoins combined occurred alongside the drop. The Bitcoin halving could be a turning point for prices, potentially leading to a new all-time high for the token.