One of the fundamental characteristics of Bitcoin that affects its price is the halving. A halving occurs approximately every four years and halves the reward miners receive for adding new blocks to the blockchain. By controlling the only way new bitcoins are introduced into circulation, the halving effectively reduces Bitcoin’s inflation rate. Historically, Bitcoin tends to see significant price increases in the year following a halving. On average, Bitcoin increases by about 125% in halving years. If we measure Bitcoin’s price at the beginning of the year, which was around $45,000, a 125% increase would put its price at $99,000.

In January 2024, 11 spot Bitcoin ETFs were approved, marking a significant milestone for the cryptocurrency and the crypto market overall. These ETFs are designed to track the actual price of Bitcoin and provide investors with an easy way to access Bitcoin through traditional brokerage companies without navigating complex cryptocurrency exchanges. The main effect of these ETFs is seen in the realm of institutional investors, providing a regulated, familiar investment vehicle. At one point, these 11 ETFs were buying more than 10 times the daily production rate of Bitcoin — and that was before the halving. After this buying spree, Bitcoin’s price soared from $45,000 to its current high of more than $73,000.

With the additional effect of spot Bitcoin ETFs, plus the effects of the halving still materializing, 2024 is shaping up to be the year when Bitcoin reaches the coveted six-figure mark. It is important to remember that investing in Bitcoin should be done with a long-term perspective. Thanks to its limited supply and other intangible assets such as high levels of decentralization, security, and resilience, Bitcoin’s value will continue to grow over the years. Regardless of whether Bitcoin reaches $100,000 in 2024, 2025, or another year, the cryptocurrency remains an attractive asset to buy, continuing its journey of long-term value growth.