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Bitcoin ETF Approval and Halving: Will it Lead BTC to a New ATH?

Last Updated January 11, 2024 3:49 PM
James Morales
Last Updated January 11, 2024 3:49 PM

Key Takeaways

  • Between ETF approval and a looming halving event, analysts and investors are speculating that the price of BTC could be on course to set a new all-time high.
  • Bitcoin reached its current record price of nearly $70,000 in November 2021.
  • If the price of Bitcoin repeats previous cycles, it will surpass its previous record this year, hitting a new peak in 2025.

From a low point of less than $16,000 in November 2022, Bitcoin (BTC) staged a remarkable comeback in 2023. The coin regained more than half of the ground it lost during the previous year’s crypto winter. 

In 2024, the United States Securities and Exchange Commission’s (SEC) recent approval of spot Bitcoin ETFs and a looming halving event are expected to drive the price of BTC even higher. Some analysts believe it can reach a new all-time high (ATH) before the end of the year. 

Peaks in the Bitcoin Price Cycle

After hitting an all-time high e of nearly $70,000 in November 2021, Bitcoin lost 80% of its market capitalization in the 12 months that followed. As such, the current record price is remembered as the peak of a bull market that occurred in 2020/2021. 

Bitcoin’s historical price performance is often modeled as a four-year cycle defined by a series of peaks and troughs. According to this, the first peak occurred in December 2013, the second in December 2017 and the third in November 2021.

After 2013’s peak, the ATH remained in place until March 2017. At the next cycle peak later that year, Bitcoin climbed to nearly $18,000, setting a record that stood until December 2020.

VanEck analysts have forecast Bitcoin surpassing its current ATH in November this year, three years after the previous peak. From there, the BTC price could climb as high as $100,000 before the end of the year, they added.

All Eyes on $100,000 in the Year of Bitcoin Halving

Modeling the price of Bitcoin according to a four-year cycle aligns with the cryptocurrency’s preprogrammed halving schedule. This process cuts the mining reward in half every four years. 

After previous halvings, Bitcoin has fallen in the weeks immediately following the event. A reduction in mining rewards means unprofitable miners have to exit the market and sell their remaining BTC. Following this year’s halving, VanEck forecasts a less pronounced impact due to major mining companies’ improved balance sheets. As such, the firm expects the post-halving market distress to be mild and short-lived.

While halving events have often been followed by a month or so of negative price action. That sais, the event’s longer-term impact has always been bullish.

Given the expectation that April’s halving will drive the price of Bitcoin upward throughout the second half of 2024, even Wall Street banks are increasingly confident that the cryptocurrency could hit $100,000 this year. Some are even suggesting it could climb to $200,000 by the end of 2025.

Institutional Money Could Fuel the Next Bitcoin Rally

As investors channel capital into the new Bitcoin ETFs, asset managers are expected to buy billions of dollars of BTC. For example, the founder of VanEck Investments predicts that Bitcoin ETFs will generate $4 and $5 billion of inflows within a fortnight. 

Meanwhile, estimating the addressable market for Bitcoin ETFs to be worth $48.3 trillion, Galaxy has forecast US-listed funds to raise $14.4 within a year.

Commenting on the increase in demand created by Bitcoin ETFs, market analyst Tom Lee observed predicted BTC surpassing $100,000 in the next 12 months, possibly even rising to $150,000. Looking even further ahead, he speculated that a price of half a million dollars within the next five  years is “definitely achievable.”

 

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