This New Year’s Eve, a countdown is on for Bitcoin!
As we turn our calendars to 2024, Bitcoin enthusiasts all over the globe find themselves on the precipice of a year that holds the promise.
Not far removed from the revelry of traditional New Year’s celebrations (10, 9, 8, 7, 6…), the Bitcoin community is abuzz with anticipation of two hugely significant events poised to reshape the crypto landscape in a profound way.
The countdown to approval: Bitcoin ETF on the horizon
In a departure from the conventional New Year’s countdown, a different timer has been set to reach zero between January 5th and 10th – the much-anticipated approval of a Bitcoin Exchange Traded Fund (ETF).
Exchange traded funds (ETF) are a financial product in America that allows people to buy Bitcoin through investing in a managed fund – similar to a Kiwisaver product. ETFs would allow hundreds of millions of investors around the world who can buy American ETF products to have access to Bitcoin as easily as they can purchase managed funds and would give big investors (like pension funds) access to the Bitcoin market for the first time.
Previous attempts at launching a Bitcoin ETF faced regulatory hurdles, but the current sentiment is notably different. Bloomberg’s assessment of a 90% likelihood for approval underscores the industry’s confidence, with timing rumours pointing to early-January and expected to be a potential catalyst for a surge in activity. In fact, one news outlet erroneously tweeted that the Blackrock ETF had been approved, sending the price of Bitcoin pumping until the tweet was corrected.
Respected analysts from investment research firms have predicted that the arrival of a Bitcoin ETF is likely to increase demand for Bitcoin as an investment asset. “The effect on price will not be a short-term spike but rather stretch out over multiple years…” (Wired).
A four-year Bitcoin spectacle: Halving looms closer
Another key factor in the anticipation of 2024 is also the eagerly awaited ‘Bitcoin halving’ scheduled for April. In the world of crypto, few events generate as much excitement and hype as a ‘Bitcoin halving’ which takes place approximately every four years and captivates both seasoned and new investors alike.
Unlike traditional currencies controlled by central banks, Bitcoin operates on a fixed supply mechanism, capped at 21 million coins. During a halving event, Bitcoin miners witness a reduction in rewards (this fourth halving reduces the Bitcoin mining reward from 6.25 BTC to 3.125 BTC per block), contributing to the scarcity narrative that underpins the cryptocurrency’s value. The resultant adjustment in supply and demand dynamics historically leads to upward price movements. Miners have to sustain costs which means the price of Bitcoin needs to increase to maintain profitable operations.
The media frenzy surrounding Bitcoin halving events has grown over the years, amplifying excitement within the crypto community and creating FOMO in investors outside of it. The approaching April 2024 halving is expected to capture global attention, with analysts again predicting potential market upheaval.
In the face of anticipation, is now the time to act?
As the countdown to these milestones continues, the crypto community holds its breath, eager to witness the unfolding of a new chapter after what some have called ‘the longest bear market in the history of Bitcoin’.
For those considering their entry into the world of Bitcoin or other cryptos, 2024 might just be an opportune moment to watch the market closely; and conduct thorough research as you consider investment
Stay curious and informed
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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.
Last updated December 26, 2023