2024 has been quite eventful for Bitcoin (BTC), whose price is currently around $58,500, up 40% year-to-date. The most successful period for the primary cryptocurrency was mid-March when it hit a new all-time high of over $73,500. Here are some important factors suggesting a new peak might be observed by the end of the year.
The Fed’s Actions
The central bank of the United States – the Federal Reserve – adopted an aggressive anti-inflation regime following COVID-19 with a series of 11 consecutive interest rate hikes starting in early 2022, setting the benchmark at the current 5.25-5.50%. A possible Fed pivot depends on economic data and the inflation rate. Recently, Chairman Powell stated that the bank may pivot earlier than expected: "The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%." The potential lowering of interest rates in the US would align with similar actions from other central banks across the globe. The European Central Bank and the Bank of Canada also pivoted earlier this year. The next FOMC meeting is scheduled for September 18, and it will be interesting to see whether the Fed will go ahead with such a move.
The US Presidential Elections
Another element that could fuel a price rally for the leading digital asset is the outcome of the presidential elections in the States. The voting is scheduled for November, with Democratic nominee Kamala Harris and Republican Donald Trump being the main contenders. Some industry participants think Trump’s possible triumph could be interpreted as good news for BTC bulls considering his recent pro-cryptocurrency stance.
The Halving
The Bitcoin halving, which took place on April 20, is also worth observing. The event occurs approximately every four years and slashes in half the daily issuance of the primary cryptocurrency. Historically, it has been a precursor of a major rally for BTC and the entire market. Some experts recently reminded that it usually takes about a year (or even more) for the asset to peak after the event. According to X user Ali Martinez, Bitcoin peaked around 530 days post-halving in previous cycles.
In conclusion, factors such as the Fed’s actions, the US presidential elections, and the Bitcoin halving can significantly impact Bitcoin’s price surge in 2024. Monitoring these events closely will help investors make informed decisions.
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