BTC at 62k, What Will Drive It Above and Beyond in 2024

After a long stretched sluggishness which lasted for months,  the buzz has returned back to the crypto market. The  fear and greed index read 70 due to investors FOMO-ing and the reason for the same is Bitcoin. Experts  have said that right now Bitcoin is trading at $44,000, but it could possibly reach $70,000 to $100,000 within the next 6 to 12 months. In this piece, we shall see what will cause Bitcoin to explode in such a manner in the next few months. 

Top Reasons Bitcoin Will Explode To Record New All-Time High

The Halving Effect 

The Bitcoin protocol has been designed in such a manner that in every 4 years, the mining rewards are reduced by half. As a result, it shoots up the price of Bitcoin. If you go by history, these halvings have caused BTC to reach a 41.81% compound annual return with a standard deviation of 78.41%. The next halving is due for April 2024 when the block hits 740,000. In the  last halving that happened in 2020, BTC was trading at $10,943. Immediately after the halving, the prices shot up and it touched $69,000 in November, 2021,  which is just a year’s time. BTC has pulled up such superficial returns in the past and this year, we also have Bitcoin adoption gaining momentum as evident from this chart. 

With that said and after assessing the history as demonstrated by this image below, staying hopeful for Bitcoin in 2024 would be a miscalculation at all. 

Interest Rate Cuts

The Federal Reserve has two choices: (i) Either Inflation Wins or (ii) Economy Dies. What’s worse? Both are interconnected but the Fed will have to make a hard choice nonetheless. As per reports, the Federal Reserve will cut interest rates 6 times in 2024. In the past, whenever the Federal Reserve has responded by either increasing or decreasing the  interest rates, the price of Bitcoin has responded in positive or negative as evident from this graph. 

In 2015, as you can see, interest rates were 0 and this pushed BTC prices. However, whenever the interest rates have been increased, investors want to park their investments in safe havens. Hence, BTC responds in opposite ways. With that said, it is most likely that when this year interest rates are cut, they will again push BTC prices above. 

Dependency on L1s Increase

Though we have already seen that L1s have struggled on the scalability front, something noteworthy has been happening which could supercharge the craze for L1s. At the moment, we are likely seeing that multiple applications built on top of gaming and DeFi are looking for near infinite scaling. As a result, they are moving on to the side-chains and L2s for achieving that scalability. But the problem with traditional roll-up solutions is increased dependency on the L1’s for DA and settlement make applications developed on top of smart-contract roll-ups solution to turn  slave to the L1 ecosystems. 

Through Sovereign Roll-up chains, those applications can enjoy the network effect without compromising their own sovereignty. Chainway has already opted for Bitcoin to be its L1 DA layer to help sustain its roll-up ecosystem. As you have already sensed that scaling and RWAs will be the new found game of 2024, it is expected that L1s like Bitcoin, Celestia and VulcanForged  will be turning relevant to fit in this narrative as a DA layer for majority of the roll-up solutions supporting new and improved use-cases. Hence, we can see new activities returning to Bitcoin where it will not just be used as a store of value  but also an ecosystem that will support development of decentralized Dapps and infrastructure in the near future. 

Conclusion

It is never too late to bid on Bitcoin irrespective of the time. The maximalists with the likes of Didi Taihuttu, who have trusted Bitcoin have been paid off handsomely. Now, it is time for you to decide how you would like to treat Bitcoin. But it is always advisable to DYOR before investing in cryptocurrencies.