Introduction
The value of Bitcoin continues to astonish the world with its bewildering rise. After surpassing the $50,000 threshold, it reached a new peak of $57,000 on February 27 (the record was around $65,000 in November 2021), launching its market capitalization to over a trillion dollars for the first time since late 2021. This means that Bitcoin is worth more than many of the world’s largest companies, such as Facebook, Tesla, and Amazon. The growth appears unstoppable, but it needs to be contextualized, and its motivations can be traced to dynamics related to this cryptocurrency.
Expectations about the halving
In a previous insight, we discussed the significant impact of the SEC’s authorization of Bitcoin spot ETFs. However, we must now consider another reason that justifies the increasingly marked growth of its value: the imminent halving (expected for April 2024). Bitcoin halving is a programmed event that occurs approximately every four years or every 210,000 blocks. During halving, the reward for Bitcoin miners is halved. This means that the quantity of new Bitcoins created and earned by miners is reduced by 50%, thereby decreasing the supply of new Bitcoins.
Halving can have a significant impact on Bitcoin’s value. By reducing the quantity of newly generated Bitcoins, the overall supply slows its growth. If demand remains stable or increases, the reduction in supply can lead to an increase in Bitcoin’s value. In the three previous halvings (2012, 2016, and 2020), there was a substantial increase in value both in the months leading up to halving and within the 12 to 18 months following it. The increase in the value of Bitcoin in the months preceding the halving is correlated to the anticipation of the halving itself. Investors, anticipating a reduction in the supply of Bitcoin and a potential growth in demand, start buying the cryptocurrency early, driving the price up.
However, discussing about precise growth percentages would be an error because we don’t know exactly how much of these increases are directly attributable to those operation, the sample size is too small to establish a cause-and-effect relationship. Additionally, the exact effect of halving on Bitcoin’s price can vary and depends on factors such as market behavior and global economic conditions at the time. Therefore, it’s essential to mark how there is no certainty that the expectations of a price increase that halving may create, it will indeed occur.
Convinction more than a certainty
Bitcoin, like all cryptocurrencies, is known for its volatility. This means that its value can change dramatically in a short period, making precise predictions challenging. However, many experts have attempted to make forecasts based on various factors. In 2025, predictions are optimistic, with some estimates ranging from $70,000 to $100,000. Some analysts even project that Bitcoin could reach $150,000 by mid-2025.
Forecasts for 2026 and longer term are even higher, with some estimates indicating a value of $400,000 or more by 2030. Some predictions go as far as $700,000. The inherent uncertainty leads to broader scenarios, as according to Cathie Wood (CEO of Ark Invest) which think the value could even reach one and a half million dollars by 2030.
The cryptocurrency market is influenced by a wide range of factors, including global economic trends, technological innovations, government regulations, and more. However, external factors could pose a threat to Bitcoin’s value, such as environmental impact from mining could lead to increased taxation to balance externalities.
The opinion trend regarding Bitcoin is indeed positive, but it’s essential to consider that Bitcoin’s rise isn’t merely a financial phenomenon; it also carries significant political implications. Its growth has raised critical questions about monetary sovereignty, financial privacy, and the power of central governments, because while someone view Bitcoin as an opportunity to democratize finance, others fear it could lead to greater instability and inequality.
Conclusion
In any case, it’s evident that Bitcoin and other cryptocurrencies will continue to influence global policies in the coming years.
As always, legislators must balance the opportunities presented by these new technologies with the need to protect consumers and maintain financial system stability, which may occasionally discourage some people from investing.
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