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21 Reasons Bitcoin Is Thriving in 2024

GeekTrend

GeekTrend

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It is hard to overstate how optimistic Bitcoin’s outlook for 2024 is. While many people may feel like they are too late (why didn’t I buy it under $100?), like they missed the opportunity, it has likely never been a better time to jump in. More specifically, the ratio of potential rewards compared to the risks behind Bitcoin has never been more attractive. Demand, supply, awareness, narrative, fundamentals; all stars seem to align to give us a memorable year 2024. In particular, here are the top 21 reasons why Bitcoin’s 2024 outlook is exceptionally bullish. Demand 1. Multiple spot Bitcoin ETFs are expected to be approved by the SEC in the coming weeks, bringing billions of dollars in additional demand as the asset becomes investable for institutions via a traditional financial product. At the same time, ETFs are raising awareness about the asset and providing regulatory clarity as well as the backing of major financial institutions. This expectation is evidenced by the decreasing discount at which Grayscale Bitcoin Trust (GBTC) is trading versus Bitcoin, from nearly 50% discount last year to below 10% discount in December 2023. Besides, countless analysts and asset managers close to the matter have shared their expectations of an imminent spot Bitcoin ETF approval. Supply 2. The fourth halving of Bitcoin’s supply is coming in April, and so far, the asset’s price action (+150% YTD) rhymes with the last three halving events, which yielded 101x, 30x, and 8x respectively, after the halving. Halving the supply means that the downward pressure on Bitcoin’s price will drop, because miners will only get half as many bitcoins to sell every day than they currently do (900 bitcoins per day). It also triggers the next level of scarcity, as the stock-to-flow ratio of Bitcoin will suddenly double. Specifically, April 2024 will make history, as Bitcoin will become the scarcest asset in the world (the highest stock-to-flow asset), taking over this title from gold for the first time. 3. Liquid supply is dropping even faster, as increasingly more bitcoins are moving to wallets controlled by illiquid owners. Specifically, more bitcoins are moving to private custody rather than being held and traded on exchanges. A lower liquid supply means that the multiplicator effect of purchases increases: When an entity buys $1 billion of Bitcoin, the market capitalization of Bitcoin increases by more than $1 billion, because this purchase impacts the price upwards. Regulation 4. FASB, the entity setting accounting and financial standards for companies in the US, voted in September 2023 to adopt fair-value accounting for Bitcoin. This change means that companies can hold Bitcoin on their balance sheet at market price and therefore can recognize unrealized gains, instead of having to treat it as an intangible and follow the impairment model. This is a significant development, as it opens the possibility for companies to increase their reported earnings and equity when their Bitcoin holdings appreciate. This change makes Bitcoin holdings more attractive for companies, not only because they can show more favorable financial results when Bitcoin rises, but also because FASB’s move can be seen as a legitimization of Bitcoin as an asset class. 5. The Satoshi Action Fund, a non-profit educational organization in the US, is expecting to pass pro-Bitcoin regulations in 10 US states in 2024, in addition to the pro-Bitcoin regulatory developments of 2023. More regulatory clarity increases institutional investments, boosts consumer confidence, and spurs entrepreneurship in the Bitcoin space, further increasing the demand for and the potential of the asset. Fundamentals 6. Adoption increases as the number of addresses with 1 full bitcoin is now at an all-time high. Similarly, addresses with over 0.1 bitcoin and addresses with over 0.01 bitcoin also show their highest level ever. 7. Bitcoin’s hashrate is now reaching a new all-time high of 500 EH/s, strengthening its status as the most secure network of all time. 8. Bitcoin’s volatility, in contrast, has been trending downward in line with the asset maturing. Low volatility for an asset is particularly important for investors looking at the ratio of return to volatility (e.g., Sharpe Ratio or Sortino Ratio). With its high return and comparatively low volatility, Bitcoin strengthens its attractiveness for investors. 9. Besides, Bitcoin’s correlation with traditional asset classes has dropped to an all-time low. Low correlation with other asset classes is making Bitcoin an extremely attractive addition to any traditional investment portfolio (e.g., hedge funds, pensions funds, family offices), because it enables asset managers to lower the volatility of their portfolio while increasing their expected returns. 10. Bitcoin’s decentralization of its mining activities is expected to increase. For instance, thought leaders like Jack Dorsey invest millions in a decentralized Bitcoin mining pool called OCEAN. While it may be a small investment so far, the move is at the very least shedding the spotlight on the issue, inviting other miners to follow suit. Further decentralizing the protocol reduces its risks and therefore makes it even more valuable. 11. Layer-2 solutions (e.g., the Lightning Network) are finally becoming scalable, enabling Bitcoin to be used as a medium of exchange: instantaneous transactions at virtually no fee. Specifically, the adoption of Lightning has increased by a factor of 10 since summer 2021. With this new function, Bitcoin as an asset in 2024 will be vastly different (and superior) from Bitcoin as an asset in previous years. 12. Bitcoin balances on exchanges are dropping because people understand the importance of self-custody. Personally, I see this development as an indication of less speculation in the market and more genuine use of an asset acting as a decentralized store of value. 13. In November 2023, we reached another new record: More than 70% of bitcoins have not moved in over 1 year. And this development happened despite Bitcoin’s price more than doubling over that period. Again, this record supports the theory that speculation in the asset is decreasing while it is replaced by long-term holding. Narrative 14. The narrative around Bitcoin as an ESG asset is finally being recognized and starting to settle: from banking the unbanked to mitigating methane emissions, incentivizing the production of renewable energy, and stabilizing power grids. Peer-reviewed publications and traditional media increasingly cover this aspect of Bitcoin, which is likely to stir further interest from the public in the asset. 15. Traditional investment managers recently turned pro-Bitcoin. One of the biggest developments of 2023 is Larry Fink’s 180-degree turnaround on Bitcoin. From calling Bitcoin “an index of money laundering” in 2017, he now vocally supports it and deems its recent rise in price as a “flight to quality.” As CEO and Chairman of the biggest investment firm in the world, Blackrock, his opinion will hardly go unnoticed. Similarly, Jurrien Timmer, Director of Global Macro at Fidelity considers it a “hedge against monetary debasement” and “exponential gold.” 16. The difference between Bitcoin and all other cryptoassets becomes increasingly

Bitcoin’s Bright Horizon: Exciting Reasons to Watch the Crypto in 2024

As crypto enthusiasts and investors look towards the future, there’s a palpable sense of optimism about the direction Bitcoin is heading in 2024. While some may believe they’ve missed the golden opportunity to invest, the current landscape presents an array of compelling reasons to consider Bitcoin as a key player in your investment portfolio. Here’s an in-depth look at the top factors placing Bitcoin in a uniquely bullish position.

Rising Demand for Bitcoin

The demand for Bitcoin is set to skyrocket with the possible approval of multiple spot Bitcoin Exchange-Traded Funds (ETFs) by the SEC. This advancement could unlock billions in new investments, making Bitcoin more accessible to institutional investors through established financial products. The potential is seen in the shrinking discount of Grayscale Bitcoin Trust (GBTC), hinting at the growing anticipation for these ETF approvals.

Bitcoin ETFs Potential

Dwindling Supply Sparks Interest

The supply dynamics of Bitcoin are shifting with the upcoming fourth halving event, anticipated to propel Bitcoin’s price much like previous cycles. This expected reduction in daily Bitcoin production for miners directly influences market scarcity and enhances the stock-to-flow ratio, piquing the interest of investors seeking rare assets.

Bitcoin Halving Event

Favorable Regulation Changes

The regulatory environment for Bitcoin is also improving. The adoption of fair-value accounting for Bitcoin by the FASB is a game-changer for companies holding Bitcoin, allowing for updated balance sheets in line with market prices. This shift not only enhances corporate financial reporting but also positions Bitcoin as a valid and attractive asset class.

Improving Fundamentals

Key fundamentals of Bitcoin, like the increasing adoption evidenced by the record number of addresses holding at least 1 Bitcoin, and the peak hashrate demonstrating unparalleled network security, are all signs of a strengthening underlying structure. Moreover, the drop in Bitcoin’s correlation with traditional asset classes makes it an exceptional addition to any investment portfolio.

Bitcoin Network Security

The Positive Shift in Narrative

Bitcoin’s story is evolving, particularly regarding its role in Environmental, Social, and Governance (ESG) practices. As more investors recognize Bitcoin’s contributions, from financial inclusion to driving renewable energy, the narrative is shaping up to be a cornerstone for the crypto’s ongoing appreciation in both value and significance.

21 Reasons Why Bitcoin Is Set to Shine in 2024

Reason Description
Spot ETFs SEC approvals will heighten institutional demand.
Supply Halving Reduced daily production enhances scarcity.
FASB Standards Companies can mark Bitcoin to market on balance sheets.
Adoption Metrics Record-high addresses with significant Bitcoin holdings.
Hashrate Records Bitcoin is the most secure blockchain in history.
Volatility Decline Maturation of Bitcoin makes it a stable investment.
Decentralized Mining Investments to diversify mining and minimize risk.
Layer-2 Solutions Scalability of Lightning Network boosts utility.
Exchange Withdrawals Private custody signs of a more mature market.
ESG Recognition Bitcoin’s contribution to sustainable practices acknowledged.
Pro-Bitcoin Managers Influential voices in finance endorse Bitcoin.

Positive Bitcoin Outlook

The bullish outlook for Bitcoin in 2024 is not merely a cause for excitement, but a call to action for prospective investors and the crypto-curious. The convergence of demand, supply, regulatory progress, robust fundamentals, and an evolving narrative around Bitcoin establishes it as a powerhouse of potential in the crypto ecosystem.

The information presented in this article is for educational purposes only. Always conduct your own research before investing in cryptocurrency.

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