According to crypto specialists, Bitcoin's return is only the beginning of a surge that will take it above $50,000 next year thanks to a procedure known as halving, which limits the creation of new units.
The greatest digital asset has risen 70% since December 31, signaling a modest recovery from an apocalyptic collapse in 2022. While the token is now trading at about $30,000, halving it has the potential to result in a 78% increase, according to Bloomberg Intelligence and Matrixport.
A halving, also known as halvening, reduces the number of tokens that Bitcoin miners receive as a reward for their efforts by half. The quadrennial event, which is scheduled for April 2024, is part of the process of limiting Bitcoin production to 21 million tokens. After each of the past three halvings, the coin broke records.
According to Jamie Douglas Coutts, a Bloomberg Intelligence analyst, the forthcoming halving is presently 50% priced based on prior cycles. Coutts believes Bitcoin will reach $50,000 by April 2024.
"Bitcoin cycles bottom around 12-18 months before the halving, and this cycle structure looks similar to past ones, albeit many things have changed — while the network is vastly stronger, Bitcoin has never endured a prolonged severe economic contraction," he added.
The Bitcoin rally has recently faltered, hampered by cooling expectations of Federal Reserve interest-rate reduction despite continuing inflation. A US regulatory assault on cryptocurrency following the collapse of the FTX exchange in November 2022 also threatens to cloud the market picture.
"If the FTX collapse was indeed the bottom of this cycle, then history would suggest that we still have approximately 350 days of accumulation before witnessing the characteristic post-halving breakout price action," said Jacob Joseph, an analyst at CCData.
According to Markus Thielen, research director at Matrixport, Bitcoin will be worth roughly $65,623 by April 2024, more than double its present value.
Bitcoin is still roughly $41,000 behind its all-time high of over $69,000 in November 2021, which happened 18 months after its halving in 2020. Crypto markets fell last year as central banks raised interest rates to combat price pressures, and digital-asset businesses went bankrupt.
"Bitcoin may reach a new all-time high in the future, but it is unlikely to see the same growth as previous cycles due to increased market size and competition from other digital assets," said CCData's Joseph.
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