Last week was a big one for Bitcoin.
That’s because the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs – a story I first put on your radar last year.
But it wasn’t without glitches. That’s because the SEC – the regulatory body for U.S. securities – was hacked right before the approval.
An announcement was posted on the social media platform X (formerly Twitter) from the SEC’s account.
It said that the SEC approved the much-anticipated spot Bitcoin ETFs. This sent the price of Bitcoin leaping to more than $48K.
But as it turned out, the announcement wasn’t true.
You’d think that the SEC would have strong cybersecurity safeguards. But that wasn’t the case.
(The Wall Street skeptic in me thinks some investors or Bitcoin miners who wanted to make some quick money planted the hack.)
Once they discovered the hack, the price of Bitcoin dropped. But Bitcoin investors didn’t have to wait long for the real announcement.
That’s because the next day, the SEC did approve spot Bitcoin ETFs. That meant the launch of 11 different ETFs.
The approval of spot Bitcoin ETFs will mean higher Bitcoin prices in the long term. That’s because an ETF enables more trading volume.
On the first day of trading, U.S.-listed Bitcoin ETFs saw $4.6 billion in volume.
Many regular brokerage accounts now offer spot Bitcoin ETFs – like Charles Schwab, Fidelity, and Interactive Brokers.
But while many people are focused on the new ETFs, there is still another big catalyst on the horizon for Bitcoin this year.
And it’s set to push the price of Bitcoin even higher. In fact, I believe that Bitcoin will double from current prices – pushing it toward $100,000 in 2024.
I’ll show you why in today’s essay.
It’s part of my 2024 prediction series, where I’m bringing you my top distortion factors for this year (catch up on Predictions 1 and 2 here and here).
The Fourth “Halving” Will Push Bitcoin Prices Higher
Bitcoin has soared over the past few months. From September to mid-January, it rallied by over 93%. As we go to press, one Bitcoin goes for just over $43K.
I recommended Bitcoin in our Distortion Report advisory in May of last year when it was trading for about $27,600.
But I believe the next Bitcoin bull market is just getting started.
The most significant increase in Bitcoin prices will happen between April and the presidential election in November.
That’s due to a computer process called the “halving.” It has to do with how new Bitcoins are created.
New Bitcoin enters the market through digital “mining.” Bitcoin miners get a reward for every new “block” of Bitcoin that they mine.
(For Bitcoin newbies, a block is a record of transactions on the blockchain. The blockchain is the digital ledger that cryptocurrencies like Bitcoin live on.)
During a “halving,” the reward for mining new blocks of Bitcoin is chopped in half. That means the amount of new Bitcoin that can enter the market is also cut in half.
Halvings happen every four years. The next one is happening this April.
In the past, Bitcoin has hit new records after every halving. You can see this trend in the chart below…
The first time, in 2012-2013, Bitcoin’s price shot up 8,845%.
The second time, in 2016-2017, Bitcoin’s price shot up 2,870%.
And the third time, in 2020-2021, Bitcoin’s price shot up 885%.
I expect the fourth halving to also send Bitcoin’s price higher.
Of course, past performance doesn’t guarantee future performance. And I don’t think we’ll see 8,000%+ returns again – not from current prices.
But if patterns repeat, Bitcoin could double or more in the post-halving months.
Based on current prices, that would put the price at more than $86,000 per Bitcoin.
By late 2024, I wouldn’t be surprised to see Bitcoin trading as high as $100,000.
That forecast is a conservative estimate compared to other market experts.
Cathie Wood of ARK Invest predicts Bitcoin could reach $650,000 in 2024.
And Adam Back – renowned as a pioneering figure in the Bitcoin community – projects that it will hit the $100,000 mark by the end of March.
What This Means for Your Money Today
If you’ve watched the price of Bitcoin shoot higher since last year, you might think you’ve missed the boat.
But with the halving on the horizon, it’s not too late to buy Bitcoin.
The best way to position yourself is to buy Bitcoin directly through accessible applications like Block’s Cash App.
With Cash App, you can start your Bitcoin portfolio with as little as $1.
If you prefer to buy Bitcoin in a regular brokerage account, the VanEck Bitcoin Trust (HODL) is a good option. It’s one of the spot Bitcoin ETFs that launched last week.
HODL tracks the price of Bitcoin minus the trust’s expenses. It has an expense ratio of 0.25%, which is lower (cheaper) than some of the other spot Bitcoin ETFs out there.
But keep in mind that Bitcoin is still a speculative asset. So, you never want to dive in headfirst.
Instead, consider investing a small amount of money on a regular basis. That could be as little as $15 every two weeks. We call this “dollar-cost averaging.”
And remember, a small investment in Bitcoin can go a long way. So never invest more than you can afford to lose.
Regards,
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Nomi Prins
Editor, Inside Wall Street with Nomi Prins