Bitcoin (CRYPTO: BTC) was trading above $43,000 on Feb. 5. Although it hasn’t been soaring after the approval of spot Bitcoin exchange-traded funds (ETFs) in January, the digital currency is still up over 80% in the past 12 months.
And there is still optimism that it can go even higher than that. Here’s a look at why the price could rise beyond $50,000 within the next seven months.
A catalyst for Bitcoin is just around the corner
Approval of a spot Bitcoin ETF did not send the cryptocurrency’s valuation soaring, but what could do the trick is a Bitcoin halving event. In such a case, the reward that crypto miners receive is cut in half to preserve the digital currency’s scarcity and to help control supply.
Previous halving events took place in 2012, 2016, and 2020. The next one could come as early as April.
Halving can be significant for the digital currency because what happens afterward is normally an uptick in price. Since Bitcoin halving is expected every four years, it shouldn’t come as a big surprise. But it can, nonetheless, result in a sharp swing in price.
What has happened after other halving events
After the last three halving events, the price of Bitcoin rose in value in the months afterward. Here’s a breakdown of how it has done after halving.
|
Year |
Price of Bitcoin When It Halved |
Price 150 Days After |
% Increase |
|---|---|---|---|
|
2012 |
$12.35 |
$127.00 |
928% |
|
2016 |
$650.53 |
$758.81 |
17% |
|
2020 |
$8,821.42 |
$10,943.00 |
24% |
Chart by Author. Source: coinledger.io
Despite halving events being expected among crypto investors, there has still been an increase in value. And if a similar pattern follows this year, then Bitcoin could enjoy a strong 2024.
Based on a price of $43,000, Bitcoin would only need to rise a little more than 16% for its valuation to top $50,000, a level it hasn’t been at since 2021. If it rises by around 20%, then it could end up around $52,000 at the 150-day mark, which would be sometime in September.
What could work against the cryptocurrency is that its price is significantly higher than where it was four years ago. It’s a lot easier for the price to spike when it’s fairly low, but the most recent 150-day halving increase corresponded to just a $2,122 rise in value. For Bitcoin to rise to over $50,000, it would require a more than $7,000 jump — the largest ever following a halving event.
Is now the time to buy Bitcoin?
If you’re bullish on Bitcoin, odds are you think it will rise a lot higher than $50,000. If you fall into that camp and are OK with the volatility and risk that comes with the cryptocurrency, then it might not be too late to invest, especially now that it is easier for more investors to gain exposure to it thanks to the approval of spot Bitcoin ETFs.
If you’re a more risk-averse investor, however, you might still want to avoid investing in this cryptocurrency because of its significant volatility.
While Bitcoin could rise to over $50,000 this year, that doesn’t mean it will stay there. Things can and do happen quickly in the crypto world (e.g., changing regulations, bans), and it’s important to brace for that unpredictability before investing in it. Otherwise, you’re better off avoiding Bitcoin, regardless of the potential bullishness that could be ahead.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
Why Bitcoin Could Rise to More Than $50,000 by September was originally published by The Motley Fool