Expectations that Bitcoin will enter a bull market in 2024 continue to drive investment decisions across all sectors. A number of reasons have been cited for the expected bull market, including spot Bitcoin ETF trading approvals and the upcoming BTC halving event. One analyst agreed with the latter and detailed why halvings lead to bull markets.
Market rises due to Bitcoin halving event
Cryptocurrency analyst James Van Straten explained to X (ex-Twitter) why the Bitcoin halving event is bullish on the price. Currently, halving is an event programmed to occur approximately every four years, with block rewards being halved each time the event occurs.
This means that the number of BTC that miners can earn for mining a block is immediately reduced by 50%, thereby significantly reducing the number of new coins in circulation. Currently, the block reward is 6.25 BTC, which will be reduced to 3.125 during the next halving.
Straten points to this reduction using monthly issuance as a case study. He explained that over the past month, a total of 61,000 BTC has been accumulated by miners and exchanges. However, after the halving, the monthly issuance is expected to decrease to 13,500 BTC, and this decrease is the most significant.
In the last 30 days, 61,000 accumulated including all cohorts, miners, and exchanges #bitcoin.
In April, the monthly circulation number will be halved to 13,500. #bitcoin.
If demand remains the same, it will outpace issuance by a factor of four.
The market will most likely find equilibrium… https://t.co/FZOWsa8AGR pic.twitter.com/yn4lsF3cPG
— James Van Straten (@jvs_btc) February 6, 2024
As Straten points out, if demand continues to rise at the same level after the halving, demand will outstrip supply by a factor of four. This will lead to changes in the market and the need to “perhaps find a higher equilibrium”. In other words, prices must rise to meet demand.
BTC price recovers from crash | Source: BTCUSD on Tradingview.com
2024 BTC price target
Another bullish factor for Bitcoin price is that the halving coincides with the US presidential election. As Matrixport head of research Markus Thielen pointed out in his analysis, this coincidence is always bullish on prices.
The report points to previous halvings and election years as indications that Bitcoin prices remained high. Over the past three halvings, BTC has shown a consistent trend, rising 152% in 2012, 121% in 2016, and 302% in 2020.
As 2024 marks another halving and election year, research analysts expect Bitcoin to end the year at $70,000. This would represent an additional 65% upside from current price levels, and if the trend holds, it would be the start of a new bull market.
“Supported by the macro environment, financial tailwinds, the US election cycle, and gradually increasing demand from TradeFi investors allocating to Bitcoin ETFs, it is plausible that Bitcoin will rise to 70,000. Apparently,” Thielen said.