With just under nine months ahead of Bitcoin‘s next halving event, the cryptocurrency community is brimming with anticipation of a potential rally that would lead the digital asset towards new all-time highs. Awaiting the addition of its 840,000th block, which is projected to make an appearance on the 21st of April 2024, the reward rate for Bitcoin miners is set to decrease by half, from 6.25 BTC to 3.125 BTC. This event will inevitably halve the inflation rate of Bitcoin’s supply.
Now, an intriguing facet of Bitcoin’s economic policy is the halving of its issuance rate, a process carried out approximately every four years. This cap ensures that Bitcoin’s supply never exceeds its hardcoded limit of 21 million tokens. The eagerly awaited 2024 halving immediately brings to mind previous halving events of 2016 and 2020, which were closely followed by remarkable price surges.
Matrixport and British multinational bank Standard Chartered recently issued optimistic forecasts, suggesting Bitcoin surging past the $100,000 mark following the 2024 halving. Morgan Creek Capital went a step further, projecting Bitcoin to surpass $300,000 by the 2028 halving.
However, this isn’t a one-sided debate. For instance, the leading artificial intelligence chatbot, ChatGPT, underscored that factors such as regulatory changes, technological innovations, and macroeconomic trends could significantly influence Bitcoin’s price. If Bitcoin matches ChatGPT’s forecast of $60-$90,000, hodlers would be looking at a stellar 2-3x increase from the current price just under $30,000 in a few years. This kind of yield is rare in traditional assets.
Yet, ChatGPT’s forecast appears conservative when compared to long-term Bitcoin pricing models such as the Bitcoin Stock-to-Flow pricing model, suggesting Bitcoin’s fair price currently at around $55K and predicting it to rise above $500K – that’s almost 17x gains from existing levels.
However, an upstart known as BTC20, dubbed “Bitcoin on Ethereum,” has been attracting attention, raising over $4.25 million in just over a week. Some enthusiasts argue that it surpasses Bitcoin given its operation on an eco-friendly, low-energy-consuming Proof-of-Stake Ethereum blockchain, as contrasted with Bitcoin’s energy-intensive Proof-of-Work chain. BTC20’s tokenomics mirror Bitcoin’s – a 21 million BTC20 token supply cap. However, tokens will be released to BTC20 stakers and not miners, respecting the same issuance schedule as Bitcoin.
While the potential for such a rise sounds promising, one cannot ignore the high-risk nature of the crypto asset class. As the 2024 Bitcoin halving approaches and alternatives such as BTC20 rise, the community will watch closely, balancing promise, optimism, and possible tension.
Source: Cryptonews
