In the world of digital currency, there has been a lot of talk about where Bitcoin is headed with almost everyone having their own opinion on it. Having recently crossed and stayed above $50k and hitting a $1 trillion market valuation, enthusiasts as well as investors are asking themselves one question: will Bitcoin take to the sky? A recent Medium blog post by IntoTheBlock outlined five major catalysts that can push Bitcoin to all-time high records or otherwise assign probabilities.
The Key Catalysts For Bitcoin
Bitcoin’s recent surge of over 30% in the past three weeks has reignited optimism among market participants at just 32% shy of its 2021 pinnacle of $69,000. However, the five major catalysts being looked into are Halving, ETFs, Easing, Elections, and Treasuries, according to IntoTheblock.
The next halving is expected to occur in April 2024 resulting in a significant event when miners’ rewards per block will be reduced from 6.25 BTC to 3.125 BTC. Historically such events have caused a reduction in Bitcoin’s hash rate only for the next few adjustments to set new all-time highs in hash rate.
IntoTheBlock estimates another surge into an all-time high just one month after the halving as miners are likely to be better prepared this time round which may act to boost the price of BTC while supporting the integrity of its blockchain system.
Accordingly, this would also relieve the selling pressure with an inflation rate reduction of BTC issuance from 1.7% to 0.85% per year after halving. Additionally, there is a chance that Bitcoin’s natural four-year market cycles could lead to buying earlier than normal by market participants who want to speed up getting to their all-time highs.
The emergence of Bitcoin Exchange-Traded Funds (ETFs) has renewed hope among investors as they attracted more than $4 billion within the first month of operation. In addition to this possibility is an influx of institutional capital with its accompanying potential for demand pickup during Q2 which could also boost BTC higher.
Furthermore, the Federal Reserve’s easing monetary policies to attenuate deflationary pressures has also supported market sentiment. The expectation of interest rate cuts along with consequent liquidity injections into financial markets may boost Bitcoin as well as stocks.
Moreover, with the looming specter of presidential elections in November 2024, politics could influence economic policies by favoring measures to stimulate market growth. The potentiality for more institutional treasuries to diversify into Bitcoin further underlines its growing acceptance within traditional financial communities. Nevertheless, these triggers provide a strong case for possible bullish momentum going forward in the coming months.
Related Reading | Altcoin Marketcap Breaks Accumulation Phase, Enters Uptrend