Three Things That Will Determine Bitcoin's Future in 2024

Investors should get ready for these occurrences worthy of national news as Bitcoin prepares for another bull market.

Taking a closer look at the past 15 years of Bitcoin's (BTC 1.75%) history, we can conclude that a number of things happened that significantly impacted the direction of the cryptocurrency. Early adopters of Bitcoin benefited from developments like the establishment of the first exchange, Mt. Gox, which made transactions easier. More recently, the introduction of spot Bitcoin exchange-traded funds (ETFs) has given the cryptocurrency a new home on Wall Street.
You may be sure that there are still a ton of life-changing experiences to come. These three events have the potential to contribute to Bitcoin's remarkable price upward trajectory this year.

A halving that has never been seen before occurs

The fourth halving of Bitcoin is expected to occur in the middle of April. Bitcoin's supply growth rate is halved, a process ingrained in the code that reduces it by half about every four years. Its growth rate is currently at 1.75%, but it will drop below 1% to about 0.8% after the next halving.
The halving has historically been a significant driver of price growth. Reduced supply growth means that prices will have to rise in order to make up for the decreased quantity of new Bitcoin, even in the case of continuous demand. The price of Bitcoin typically rises by 125% the year after a halving. 

Even if past success does not predict future outcomes, this halving seems to be different than any other. That's because Wall Street's greatest names have become Bitcoin's new buyers for the first time ever.

After Bitcoin ETFs were approved, companies like Fidelity and BlackRock started to buy bitcoins at a never-before-seen rate. All these new ETF sponsors own about 4 percent of the total supply of Bitcoin.

The institutions purchasing Bitcoin today have far larger wallets and access to more funds than they did during previous halvings, when retail investors were the main buyers. This halving might be especially explosive if their rate of accumulation continues, especially given there are now fewer bitcoins available for buy on exchanges than there were in 2018. The halving will put more pressure on Bitcoin given the current supply shortage and may cause a historically large price hike.

Accepting the Bitcoin norm

A few businesses announced that they had bought Bitcoin during the last cryptocurrency bull market. Among them was the business software firm MicroStrategy (MSTR 9.36%), which changed its name to a Bitcoin development company.

Accumulating around 205,000 bitcoins since 2020, MicroStrategy and its former CEO Michael Saylor own close to 1% of all the Bitcoin that will ever be generated. Saylor is laying the groundwork for what he terms the "Bitcoin standard," citing the depreciating value of the dollar and the qualities that make Bitcoin a better asset.

Even though this was dismissed and mocked when Bitcoin's value plummeted during the cryptocurrency winter, Saylor persisted in his belief and accumulation. With a $7.8 billion unrealized gain, MicroStrategy's stock price has increased by more than 700% in the last year.

Saylor's adoption of the Bitcoin standard is demonstrating to the globe that using Bitcoin instead of cash is a smart way to improve one's financial situation. It is practically a given that other businesses are beginning to recognize how feasible the Bitcoin standard is when there is a working blueprint.

Don't be shocked if several more well-known businesses, like Mastercard, Google, or Amazon, declare that they would also follow the Bitcoin standard during the upcoming bull market. If any of these well-known brands decides to include Bitcoin in its balance sheets, it would significantly improve the cryptocurrency's trajectory.

The ultimate achievement remains possible.

Not only has businesses chosen to buy Bitcoin in the most recent bull market cycle, but a nation has also chosen to recognize Bitcoin as legal cash. El Salvador, a nation in Central America, declared in June 2021 that it will accept Bitcoin as legal tender. The nation has grown the quantity of bitcoins in its treasury by about 3,000 since the announcement.

President Nayib Bukele has started mining operations using one of the nation's many volcanoes, eliminated all Bitcoin taxes, and launched a bond program that utilizes the cryptocurrency as part of its plan centered around Bitcoin.

El Salvador's little place in the world stage meant that most people were unaware of the decision. After three years of data, however, the little nation is finding that the results of making Bitcoin official tender are favorable.