Expectations of a Bitcoin bull run in the year 2024 continue to drive investment decisions across the space. A number of reasons have been given for the expected bull run, including the approval of Spot Bitcoin ETFs for trading and the upcoming BTC halving. One analyst echoes the latter and explains why the halving will create a bull market.
The Bitcoin Halving Event will send the market higher
Crypto analyst James van Straten took to X (formerly Twitter) to explain why Bitcoin’s halving is bullish for the price. Now the halving is an event that will occur approximately every four years, with the block rewards halving each time it occurs.
This means that the amount of BTC miners receive for mining a block is immediately reduced by 50%, drastically reducing the number of new coins entering circulation. Currently the block reward is 6.25 BTC and the next halving will reduce it to 3.125.
Straten points to this reduction, using the monthly issue as a case study. He explains that a total of 61,000 BTC have been collected by miners and exchanges over the past month. However, after the halving, monthly issuance is expected to drop to 13,500 BTC, and it is this drop that is the most significant.
61,000 have been collected in the last 30 days from all cohorts, miners and exchanges included #Bitcoin.
When the monthly issue is halved to 13,500 in April #Bitcoin.
If demand remains the same, it will exceed issuance by a factor of 4.
The market will most likely find an equilibrium… https://t.co/FZOWsa8AGR pic.twitter.com/yn4lsF3cPG
— James Van Straten (@jvs_btc) February 6, 2024
As Straten notes, if demand remained at the same level when the halving occurred, 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 meet demand.
BTC price recovers from crash | Source: BTCUSD on Tradingview.com
Targets for BTC price in 2024
Another bullish factor for the Bitcoin price is that the halving year coincides with the presidential elections in the United States. As Markus Thielen, head of research at Matrixport, noted in an analysis, this coincidence has always been bullish for the price.
The report refers back to the previous halving and election years, showing that Bitcoin’s price ended at a high level. Over the past three halves, BTC has risen 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 Bitcoin’s price to end the year at $70,000. This would mean another 65% rally from the current price level, and if trends continue, the start of a new bull market.
“Supported by the macro environment, monetary tailwinds, the US election cycle and gradually increasing demand from TradeFi investors investing their shares in Bitcoin ETFs, a Bitcoin rally to 70,000 seems plausible,” Thielen said.
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