Bitcoin's triple trigger - opinion

In the ever-turbulent sea of global finance, where regulatory fog and geopolitical squalls are the norms, Bitcoin, the digital age’s answer to gold, is charting a bold course through uncharted waters.

As we navigate the year 2024, three beacons flash on the horizon, signaling potential windfalls for the cryptocurrency. Let’s set sail through these waters, guided by the insights of the past and the anticipation of what lies ahead.

The halving event: A lighthouse in the fog

First and foremost, the halving event stands as a lighthouse, cutting through the fog with its predictable yet profound impact on Bitcoin’s value.

Every four years, as if by the decree of some digital Poseidon, the reward for mining new bitcoins is slashed in half, reducing the influx of new coins into circulation.

This April, we anticipate this event with bated breath, as history has shown us the dramatic upswings that can follow.

Consider the past halving events: in 2012, a leap from $13 to $82; in 2016, a climb from $650 to $797; and in 2020, a monumental surge from $9,161 to $17,396. These aren’t mere fluctuations; they are tidal waves, reshaping the landscape in their wake.

ETFs: The trade winds of institutional investment

The second trigger, the advent of Bitcoin ETFs (exchange-traded funds), is akin to the trade winds, propelling the once-rogue vessel of cryptocurrency into the mainstream financial fleet.

These ETFs have opened the floodgates to institutional investors and conservative retail players alike, who had been waiting on the sidelines for a nod of legitimacy from regulatory bodies like the SEC.

With each new ETF approval, a gust of demand sweeps through the Bitcoin ecosystem, pushing prices upward as supply struggles to keep pace.

As nations around the globe hoist their sails to catch this wind, the impact on Bitcoin’s price could be both profound and enduring.

The geopolitical and economic currents

Lastly, we must consider the undercurrents of geopolitical and economic shifts that perennially shape the financial seascape.

In times of uncertainty, Bitcoin has emerged as a digital safe haven, much like gold in the analog age. As traditional economies grapple with inflation, currency devaluation, and political instability, Bitcoin offers an anchor in the storm – a decentralized, borderless asset that transcends the tumult of nations.

As we chart the course for Bitcoin in 2024, these three triggers – the halving event, the rise of ETFs, and the ever-present geopolitical and economic currents – stand as beacons and winds that could propel Bitcoin to new horizons.

Yet, as with any voyage into uncharted waters, the journey will be fraught with volatility and unpredictability.

For those willing to navigate these waters, the potential rewards are as boundless as the sea itself. But remember, in the world of cryptocurrency, as on the high seas, fortune favors the bold.

The writer is dean of the School of Economics at the College of Management.