Bitcoin’s price is anticipated to experience significant growth, with various factors contributing to this bullish outlook. The recent inflow of thousands of BTC into Bitcoin ETFs suggests increasing institutional interest and investment. Analysts like Tim Draper predict a surge post the 2024 halving, with a potential price reaching $250,000. Additionally, some optimistic projections even speculate a Bitcoin price of $500,000.
Bitcoin halving set to make BTC scarcer than gold
The historical correlation between Bitcoin halving events and bull markets further supports this positive sentiment. The upcoming halving scheduled for April 2024 is expected to trigger another bullish phase.
While opinions vary, the general consensus remains optimistic about Bitcoin’s future value, fueled by both institutional interest and historical market patterns. Over the weekend, Bitcoin technical analyst and stock-to-flow model creator “PlanB” stated that following the halving, “Bitcoin will be scarcer than gold and real estate.”
However, he said that he would not be surprised if Bitcoin’s market capitalization, which is currently less than $1 trillion, remained lower than that of gold, which is currently less than $10 trillion.
With some basic math and assumptions, dividing a $10 trillion market valuation by 20 million coins results in a BTC price larger than $500,000.
However, halving gains are typically recognized a year after the event, so there is unlikely to be a huge price increase after April if history repeats itself.
In addition, increasing Bitcoin’s market value tenfold would necessitate a significant influx of new capital, which does not appear to be available at the time, given the existing environment.
Gold and Bitcoin market performance
At the time of writing, BTC is worth $43,106.91, down 0.0% from an hour ago and up 0.1% from yesterday. The value of BTC today is 2.1% higher than what it was seven days ago. In the last 24 hours, the total volume of Bitcoin transactions was $13,558,775,646.
The global crypto market cap is now $1.74 trillion, up 0.49% in the last 24 hours and 56.77% from a year ago. As of today, BTC has a market cap of $846 billion, reflecting a 48.73% domination. Meanwhile, stablecoins’ market cap is $137 billion, accounting for 7.9% of the total crypto market cap.
The gold price (XAU/USD) continued to fall in Monday’s European session, owing to January’s positive US Nonfarm Payrolls (NFP) statistics. Investors expect the Federal Reserve (Fed) to hold interest rates unchanged at March’s monetary policy meeting in the range of 5.25%-5.50%, as strong labor market data has strengthened the case for keeping interest rates higher until spring ends.
Strong labor demand and greater salary offerings by US firms to retain or hire workers point to a positive demand picture. This has also signaled a sustained inflationary environment. Therefore, interest rates must remain high to prevent further escalation.
While the gold price has fallen, the outlook for US bond yields and the US Dollar Index (DXY) has greatly improved. The USD Index has regained the 104.00 resistance level for the first time in two months. Meanwhile, the US Institute of Supply Management (ISM) Services PMI for January focuses on the service sector, which accounts for two-thirds of the GDP.
According to statistics from the Multi Commodity Exchange (MCX), gold prices in India decreased on Monday. The gold price remained at 62,838 Indian Rupees (INR) per 10 grams, down INR 37 from the INR 62,875 it cost on Friday.
In terms of futures contracts, gold prices fell from INR 62,562 to INR 62,252 per 10 gms.
The gold price has fallen to approximately $2,023 as the latest job data has shifted bets in favour of early Federal Reserve rate reduction.
According to the CME FedWatch tool, a rate cut at the March policy meeting is no longer possible, although May bets remain viable.
On Friday, the United States Bureau of Labor Statistics (BLS) reported that payrolls climbed by 353K in January, nearly doubling the consensus of 180K and remaining higher than the upwardly revised December statistics of 333K.
Average hourly earnings rose by 0.6%, exceeding expectations of 0.3% and the previous increase of 0.4%. The annual salary rise was 4.5% higher than the predicted 4.1% and the previous measurement of 4.4%. The annual average hourly earnings for December were changed from 4.1% to 4.4%.
