Everyone in the cryptocurrency world knows that 2024 is the "carnival year" for the cryptocurrency world, and it is widely believed that it may be a bull market year for the cryptocurrency world. Why do people think that 2024 is a bull market for the cryptocurrency world?
The price fluctuation of Bitcoin is affected by both internal and external factors. First, the internal factors are mainly related to the environment within the blockchain industry, that is, the Bitcoin halving cycle. This cycle not only affects the production of Bitcoin, but also has a far-reaching impact on the entire blockchain industry. During this cycle, the price of Bitcoin usually fluctuates significantly, attracting more and more investors to pay attention and participate.
On the other hand, external factors cover various variables in the traditional financial market, including the Fed's interest rate hike, the launch of Bitcoin ETFs, and the US presidential election. These factors will not only affect the trend of the entire financial market, but also have a direct impact on the price of Bitcoin. In particular, the Fed's interest rate hike policy will affect the interest rate level of the entire market, and then affect the yield and investment value of Bitcoin. In addition, the launch of Bitcoin ETFs will also provide more investment channels and opportunities for Bitcoin, thereby affecting its price. Finally, the results of the US presidential election will also have a profound impact on the price of Bitcoin, because it will be related to the policy orientation and development direction of the entire financial market.
In short, Bitcoin prices are affected by many factors, whether it is the internal halving cycle or the external traditional financial market variables, investors need to pay attention to and grasp them at all times. Only by fully understanding these factors and arranging investment strategies reasonably can we get better investment returns in a volatile market.
Bitcoin halving trends over the years
The Bitcoin halving bell rings every four years, and there are 319 days until the next halving. In the long river of history, the Federal Reserve has gone through four rounds of interest rate hikes, each of which has a profound economic background and the influence of the global environment.
The first round of interest rate hikes began in February 1994 and lasted for 12 months, with the benchmark interest rate rising from 3% to 6%. During this round of interest rate hikes, the US economy prospered under the drive of the "new economy", but inflationary pressure also emerged, and the Federal Reserve raised interest rates to cool down the economy.
The second round of interest rate hikes began in June 1999 and lasted for 11 months, with the benchmark interest rate raised from 4.75% to 6.5%. At the time, the global economy was experiencing the Internet bubble and the boom of dot-com stocks. In order to prevent the bubble from bursting, the Federal Reserve raised interest rates again.
The fourth round of interest rate hikes began in December 2015 and lasted for 36 months, with the benchmark interest rate raised from 0% to 2.25%. During this period, the global economy was undergoing a recovery phase after the US subprime mortgage crisis. China's economy was growing rapidly, the commodity bear market began, oil prices plummeted, and Brexit and other events put the global economy under deflationary pressure. The Federal Reserve started a cycle of interest rate hikes in order to curb the rise of inflation and the possibility of future stagflation.
Now, industry insiders generally predict that the Federal Reserve will cut interest rates around mid-2024. This prediction is mainly based on inflation data and unemployment rates. However, there is still uncertainty about the specific situation, and we need to continue to observe the changes in the global economic situation and various data.
The first halving occurred in November 2012, like the dawn of light in a long night. The lowest point occurred after 357 days, and the highest point occurred after 371 days, a total of 735 days. Calculated from the beginning of the halving, the highest increase reached an astonishing 104 times.
The second halving occurred in July 2016, and it was like a messenger of spring, announcing the end of the cold winter. The lowest point occurred 546 days ago, and the highest point occurred 518 days later, a total of 1,071 days. The highest increase from the beginning of the halving was 40 times.
The third halving occurred in May 2020. It was like the scorching sun in summer, illuminating the entire market. The lowest point occurred 518 days ago, and the highest point occurred 546 days later, with a total duration of 1071 days. The highest increase from the beginning of the halving was 7.5 times.
As for the fourth halving, we can see that compared with the previous three times, the similarities are that there always seems to be a lowest point before each halving, and it occurs within 1-1.5 years; the high point after the halving occurs within 1-1.5 years; there are basically opportunities for secondary or even multiple bottoming out before the halving, and the intervals between bottoming out vary; there is basically a bull market before the halving, with the increase ranging from 6 times at the beginning to 4 times, and then to 3.5 times; once the halving begins, there is no opportunity for a second bottoming out, and it all soars all the way.
Jamil Nazarali, CEO of EDX Markets, said in a recent interview with Benzinga that Bitcoin (BTC) has the potential to become a global reserve asset. While discussing the challenges and opportunities in the digital asset space, Nazarali revealed a bright future for Bitcoin and Ethereum (ETH), with his optimism stemming from the power and versatility that cryptocurrencies offer.
One of the main advantages of Bitcoin over traditional assets such as gold is that it is easy to transfer and is not subject to regulatory control by any institution or organization. As he said, "Bitcoin is easier to carry than a bag of gold." These attributes make Bitcoin a very practical alternative in the digital age and are favored by international financial giants, senior officials of many countries, venture capital, etc.
Bitcoin’s journey from a groundbreaking digital currency to a potential global reserve asset is a testament to the impact that cryptocurrencies can have on the financial sector. As public trust and utility continue to grow, Bitcoin’s role as a store of value and medium of exchange could far exceed expectations.
However, the differences are also obvious: not every halving cycle has a double top; as the volume gets bigger and bigger, the increase after each halving is getting lower and lower, from 100 times at the beginning to 7.5 times recently; the slope of each rise is getting lower and lower (63°-48°-31°), and the overall situation seems to be developing towards an arc top.
The purpose of Bitcoin halving is to create scarcity. As a product of the 2009 financial crisis, Bitcoin aims to be an alternative to fiat currencies that is not subject to inflation. Therefore, the halving event is crucial to creating a deflationary protocol. Halving causes an imbalance and tension between supply and demand, and historically, halving events always generate a bull market in the following months. This is because of the simple law of supply and demand - the scarcer the asset, the more valuable it will be as demand increases.
The halving of Bitcoin leads to an imbalance and tension in the supply and demand relationship. Assuming that the demand remains unchanged, the supply is reduced by half, and the price will inevitably double. The demand for Bitcoin here is actually the consensus of Bitcoin. The demand for Bitcoin has been increasing. In the industry, in addition to changes in supply and demand, there is also hype about the halving concept. Of course, this hype will continue to decrease as Bitcoin's market share decreases.
In the first halving cycle, Bitcoin increased by more than 500 times; in the second, it increased by more than 100 times; and in the third, it increased by more than 20 times. Therefore, according to the decreasing trend of the increase, the increase in this halving is one-fifth of 20 times, which is 4 times, corresponding to a price of 80,000 US dollars.
The passage of Bitcoin ETF is only a matter of time. Wall Street heavyweights such as BlackRock and Fidelity have applied for Bitcoin spot ETFs. Although they have been rejected by the SEC, this request has been supported by the court. In addition, more and more large Wall Street institutions have also joined the ranks of applications. Finally, there is another important external factor - the Federal Reserve's interest rate cut. The interest rate cut will bring a large amount of funds to the market, and part of these funds will flow into the crypto market, driving up the price of Bitcoin.
In general, this bull market is very different from the past. The emergence of Bitcoin ETFs has allowed more people, institutions, traditional funds, and the real economy to enter the market. Just as simple as stock trading, Bitcoin ETFs allow ordinary people to participate in Bitcoin investment. In addition, large traditional funds can also invest in Bitcoin in a compliant manner, which will increase on-site funds and affect the overall market sentiment. Are you ready for this opportunity?
Institutional predictions for Bitcoin price in 2024
Looking back at the nearly 30-year cycle of the United States, the Fed's interest rate hike cycle has lasted for a long time, and the fourth round of interest rate hikes was launched in 2015. The background at that time was China's 4 trillion yuan flood, the start of the commodity bear market, the sharp drop in oil prices, the transition of China's industrial level to maturity, and the Brexit of the United Kingdom. These factors led to the long wave from the recession to the depression period, and the macro-economy faced the possibility of turning from inflation to stagflation. In this case, the Federal Reserve started a cycle of interest rate hikes to curb inflation. Tim Draper, according to industry insiders, the Federal Reserve will cut interest rates around mid-2024. Tim Draper, Adam Back, Tom Lee, founder of the cryptocurrency investment fund of big names, and Tom Lee, former chief equity strategist of JPMorgan Chase, have all made bids. Who is the real "bull market"?
The emergence of Bitcoin ETFs has made the atmosphere of this "bull market" even stronger. Bitcoin ETFs refer to exchange-traded funds that track the price of Bitcoin. It is as simple as buying stocks, allowing ordinary retail investors to participate in Bitcoin investment. The emergence of such funds has not only expanded the audience of Bitcoin, but also increased the funds on the market.
In addition, the impact of Bitcoin ETF on market sentiment cannot be ignored. People compare it with the gold ETF of that year and believe that after the approval of Bitcoin ETF, the Bitcoin market will also usher in a super bull market. After all, Bitcoin is called digital gold and will play the role of gold in the future virtual world of the Metaverse.
The passage of Bitcoin ETF is only a matter of time. Wall Street heavyweights such as BlackRock and Fidelity have applied for Bitcoin spot ETFs. Although they have been rejected by the SEC, this request has been supported by the court. In addition, more and more large Wall Street institutions have also joined the ranks of applications. Finally, there is another important external factor - the Federal Reserve's interest rate cut. The interest rate cut will bring a large amount of funds to the market, and part of these funds will flow into the crypto market, driving up the price of Bitcoin.
In general, this bull market is very different from the past. The emergence of Bitcoin ETFs has allowed more people, institutions, traditional funds, and the real economy to enter the market. Just as simple as stock trading, Bitcoin ETFs allow ordinary people to participate in Bitcoin investment. In addition, large traditional funds can also invest in Bitcoin in a compliant manner, which will increase on-site funds and affect the overall market sentiment. Are you ready for this opportunity?
Fed rate hike cycle
The first round of interest rate hikes: from February 1994 to February 1995, lasting 12 months, with the benchmark interest rate rising from 3% to 6%.
The second round of interest rate hikes: June 1999-May 2000, lasting 11 months, the benchmark interest rate was raised from 4.75% to 6.5%.
The third round of interest rate hikes: June 2004-July 2006, lasting 25 months, the benchmark interest rate was raised from 1% to 5.25%.
Throughout history, the Federal Reserve has gone through four rounds of interest rate hikes, each of which was deeply influenced by the economic background and international situation.
The first round of interest rate hikes began in February 1994 and lasted for 12 months, with the benchmark interest rate rising from 3% to 6%. The main purpose of the interest rate hikes at this stage was to curb global inflation after the collapse of the Soviet Union in 1991.
The second round of interest rate hikes lasted from June 1999 to May 2000, lasting 11 months, with the benchmark interest rate raised from 4.75% to 6.5%. This rate hike was in response to the overheating of global economic growth and the bursting of the Internet bubble after the Asian financial crisis.
The third round of interest rate hikes lasted 25 months from June 2004 to July 2006, during which the benchmark interest rate was raised from 1% to 5.25%. This rate hike was mainly aimed at alleviating the re-overheating of the global economy after the bursting of the US real estate bubble.
The last round of interest rate hikes lasted 36 months from December 2015 to December 2018, when the benchmark interest rate was raised from 0% to 2.25%. This rate hike was after the 2008 US subprime mortgage crisis, when the Fed quickly lowered the benchmark interest rate to 0-0.25%, which lasted until 2015. The global economy was still facing deflationary pressure, China's 4 trillion yuan flood of money led to a commodity bear market, and international events such as Brexit caused the long wave to shift from recession to depression, and the macro economy faced the possibility of turning from inflation to stagflation. Against this background, the Fed started a rate hike cycle.
According to analysis by industry insiders, the Federal Reserve will cut interest rates around mid-2024. This forecast is based on indicators such as inflation data and unemployment rate. However, the future economic situation is still uncertain, which requires our continued attention and research.
The fourth round of interest rate hikes: from December 2015 to December 2018, lasting 36 months, the benchmark interest rate was raised from 0% to 2.25%.
The background at that time was that after the US subprime mortgage crisis in 2008, the Federal Reserve quickly lowered the benchmark interest rate to 0-0.25%, which lasted until 2015. China injected 4 trillion yuan into the money supply. The commodity bear market began in 2011. From 2014 to 2016, oil prices plummeted from 110 to 27. China's industrial level shifted from the late take-off stage to the mature stage. The UK left the EU, and the long wave shifted from the recession stage to the depression stage. The macro-economy faced the possibility of shifting from inflation to stagflation.
Synchronous with the Nasdaq, in August 2015, the second test before the Bitcoin halving was completed. The decline in energy prices has even caused the CPIs of China and the United States to show signs of deflation. In order to curb the rise of inflation caused by short-term energy surplus and the possibility of stagflation in the future, the United States has started a cycle of interest rate hikes.
According to industry insiders, the Federal Reserve will cut interest rates around the middle of 2024. Their analysis is based on inflation data, unemployment rate and other conditions. We will not go into detail here.
US presidential election
As we all know, the US presidential election is held every four years, and the Bitcoin halving cycle is also every four years. This mysterious "halving every four years" seems to be a clever arrangement by Satoshi Nakamoto. Just like the election and halving are scheduled, the half year of halving is also the year of the US presidential election. Next year is 2024, Bitcoin will be halved in May, and the presidential election will be held in November. So, what is the inextricable connection between the presidential election and the interest rate cut?
Politicians often stimulate the economy through loose monetary policy to win the favor of voters. However, the side effect of loose monetary policy is inflation. In order to stabilize people's hearts, they will choose to raise interest rates to control inflation, but this will cause new problems - the stock market and housing market will fall, and people's investments will be damaged. In the past two years, President Biden has been raising interest rates, causing many people to lose their investments and lose their jobs. These victims will inevitably vent their grievances on the president, so the next president's campaign slogan will definitely be to cut interest rates.
Considering these two aspects, a rate cut in 2024 or 2025 seems to be the general trend. The last question is, in which month will the big bull market appear? According to the previous cases, it usually happens at the end of the year, but the bull market in 2021 is an exception, with a double top pattern. Therefore, it is difficult to predict the specific months, which may occur before or after the halving. In the months when the top may appear, we need to pay close attention and "go down the mountain" at the right time. Then we will invest the profits in the next round of bear market to buy the bottom, and so on, and continue to accumulate wealth.
Bitcoin’s Path to Global Acceptance
Bitcoin (BTC) has the potential to become a global reserve asset, Jamil Nazarali, CEO of EDX Markets, said in a recent interview with Benzinga. Nazarali discussed the challenges and opportunities in the digital asset space, revealing a bright future for Bitcoin and Ethereum (ETH). His optimism revolves around the power and versatility that cryptocurrencies offer.
One of the main advantages of Bitcoin over traditional assets such as gold is that it is easy to transfer and is not subject to any government or institutional supervision and control. "Bitcoin is easier to carry than a bag of gold." These attributes make Bitcoin a very practical alternative in the digital age and are favored by international financial giants, senior officials of many countries, venture capital, etc.
Bitcoin’s journey from a groundbreaking digital currency to a potential global reserve asset demonstrates the impact that cryptocurrencies can have on the financial sector. As public trust and utility continue to grow, Bitcoin’s role as a store of value and medium of exchange could far exceed expectations.
