21 reasons to tell you: Why are you optimistic about the Bitcoin market in 2024?

Crypto老K · 2023-12-19T08:46:29.000Z

Bitcoin’s prospects for 2024 cannot be overstated. While many may feel like they're too late (why didn't I buy under $100?), like they missed an opportunity, now may not be a better time to step in. More specifically, the ratio of potential rewards to the risk behind Bitcoin has never been more attractive. Here are 21 reasons to be unusually optimistic about Bitcoin’s prospects in 2024. Demand 1. Multiple spot Bitcoin ETFs are expected to receive SEC approval in the coming weeks, creating billions of dollars in additional demand as institutions can invest in the asset through traditional financial products. At the same time, ETFs are raising awareness of the asset and providing regulatory transparency and support from major financial institutions. This expectation is evidenced by Grayscale Bitcoin Trust’s (GBTC) declining discount to Bitcoin trading, from a discount of nearly 50% last year to less than 10% in December 2023. Additionally, this view has been shared by countless analysts and asset managers close to the matter – their expectations for the imminent approval of a spot Bitcoin ETF. Supply 2. The fourth halving of Bitcoin supply is coming in April. So far, the asset’s price trend (year-to-date +150%) is consistent with the previous three halving events. The post-halving yields are respectively 101x, 30x and 8x. A supply halving means that downward pressure on Bitcoin's price will decrease, as miners will only be able to sell half as many Bitcoins per day as they currently do (900 Bitcoins per day). It also triggers the next level of scarcity, as Bitcoin’s stock-to-flow ratio will suddenly double. Specifically, history will be made in April 2024, as Bitcoin will become the scarcest asset in the world (the asset with the highest stock-to-flow ratio), displacing gold for the first time. 3. As more and more Bitcoins are moved into wallets controlled by illiquid owners, the liquidity supply decreases faster. Specifically, more Bitcoin is moving to private custody rather than being held and traded on exchanges. Reduced liquidity supply means an increased multiplier effect from purchases: when an entity purchases $1 billion of Bitcoin, the market cap of Bitcoin increases by over $1 billion because this purchase affects the price increase.Regulation 4. The FASB, the entity that sets accounting and financial standards for U.S. companies, voted in September 2023 to adopt fair value accounting for Bitcoin. The change means companies can hold Bitcoin on their balance sheets at market prices, allowing them to recognize unrealized gains without having to treat it as an intangible asset and follow an impairment model. This is a significant development as it opens up the possibility for companies to increase their reported earnings and equity as their Bitcoin holdings appreciate in value. This change makes holding Bitcoin more attractive to businesses, not only because they can show more favorable financial performance when Bitcoin rises, but also because the FASB move can be seen as legitimizing Bitcoin as an asset class. 5. In addition to pro-Bitcoin regulatory progress in 2023, the U.S. non-profit educational organization Satoshi Action Fund expects to pass pro-Bitcoin regulation in 10 U.S. states in 2024. Greater regulatory clarity will increase institutional investment, boost consumer confidence, and stimulate entrepreneurship in the Bitcoin space, further increasing demand and potential for the asset. Fundamental 6. Adoption increases as the number of addresses holding 1 full Bitcoin reaches an all-time high. Likewise, addresses with more than 0.1 BTC and addresses with more than 0.01 BTC also show their highest ever levels. 7. Bitcoin’s hashrate has now reached an all-time high of 500 EH/s, cementing its status as the most secure network ever. 8. In contrast, Bitcoin’s volatility trends downward as the asset matures. An asset's low volatility is particularly important for investors who focus on the ratio of return to volatility, such as the Sharpe ratio or the Sortino ratio. Bitcoin has enhanced its appeal to investors with its high returns and relatively low volatility. 9. Additionally, Bitcoin’s correlation with traditional asset classes has fallen to all-time lows. The low correlation with other asset classes makes Bitcoin an attractive addition to any traditional investment portfolio (e.g. hedge funds, pension funds, family offices) as it enables asset managers to reduce the volatility of their portfolios while Increase expected returns.10. The degree of decentralization of Bitcoin mining activities is expected to increase. For example, thought leaders like Jack Dorsey invested millions of dollars in a decentralized Bitcoin mining pool called OCEAN. While it may be a small investment so far, the move at least puts the issue in the spotlight and invites other miners to follow suit. Further decentralizing a protocol can reduce its risk, making it more valuable. 11. Layer 2 schemes (such as the Lightning Network) finally become scalable, enabling Bitcoin to be used as a medium of exchange: almost free, instant transactions. Specifically, Lightning Network adoption has increased 10x since the summer of 2021. With this new feature, Bitcoin as an asset in 2024 will be significantly different (and superior) to Bitcoin as an asset in previous years. 12. Bitcoin balances on exchanges are declining as people understand the importance of self-custody. Personally, I believe this development signals less speculation in the market and a more authentic use of assets as decentralized stores of value. 13. In November 2023, we hit another new record: over 70% of Bitcoins have not moved in over 1 year. This development occurred despite the fact that the price of Bitcoin has more than doubled during this period. This record once again supports the theory that speculation in the asset is declining while being replaced by long-term holdings. Narrative 14. The narrative surrounding Bitcoin as an ESG asset is finally being recognized and starting to be addressed: from providing banking services to the unbanked to reducing methane emissions, incentivizing the production of renewable energy, and stabilizing the power grid. Peer-reviewed publications and traditional media are increasingly reporting on this aspect of Bitcoin, which may further fuel public interest in the asset. 15. Traditional investment managers have recently switched to supporting Bitcoin. One of the biggest developments of 2023 is Larry Fink’s 180-degree turn on Bitcoin. Starting out in 2017 by calling Bitcoin a "money laundering index," he now openly supports Bitcoin and believes its recent price rise is a "shift toward quality." As CEO and chairman of BlackRock, the world's largest investment firm, his perspective is hard to ignore. Likewise, Jurrien Timmer, global macro director at Fidelity, sees this as a "hedge against currency devaluation" and "index gold." 16. The difference between Bitcoin and all other crypto-assets is becoming increasingly clear: one is a commodity (an asset without an issuer), while almost all other crypto-assets are securities (not truly decentralized assets) . With upcoming regulations likely to support this stance, Bitcoin's unique position will once again be highlighted. Perception 17. El Salvador, where Bitcoin is legal tender, had its credit rating upgraded by Standard & Poor's in November 2023, indicating the early success of its Bitcoin strategy. Additionally, in December 2023, the country’s Bitcoin investment value turned positive for the first time, after two years of Bitcoin accumulation during the asset’s longest bear market. 18. Additionally, a libertarian economist who openly supports Bitcoin was elected President of Argentina in November 2023. Javier Milei's video has gone viral in which he denounces the evils of socialist economies and fiat currencies. For example, his mid-September 2023 interview with Tucker Carlson is one of the most viewed videos on the X platform, with over 400 million views. 19. Several U.S. presidential candidates will make Bitcoin a talking point in the 2024 election. Specifically, prominent candidates for the highest office in the United States who support Bitcoin include Ramaswamy, Kennedy, and DeSantis. These discussions will bring Bitcoin to the forefront and force all candidates to take a stand on the issue. Beyond 20. In November 2021, the integration of the Bitcoin protocol Taproot upgrade allowed for the implementation of smart contracts directly on the Bitcoin blockchain. Taproot not only simplifies transaction efficiency, but also unlocks the potential to perform complex contract-like functions directly on the Bitcoin network, benefiting from its decentralization, security, and robustness. This advancement brings new possibilities for decentralized finance (DeFi) and other applications. Such developments will begin to occur in 2023 and could become a major milestone in 2024. 21. In the coming wave of Bitcoin adoption, it may become clear that Bitcoin is more than just currency.For example, when U.S. Major Jason Lowery released his best-selling book Software Wars earlier this year, it raised awareness of Bitcoin's potential well beyond the confines of currencies and financial markets. Specifically, Bitcoin's security can be used not only for financial information, but also as a network security protocol, which may become a strategic imperative for the national security of all countries. As Hal Finney posted on December 5, 2010, “Bitcoin is a global, decentralized, and consistent database,” inviting readers to consider the many applications of such a database. While the idea is still in its infancy, the seeds have been sown and an extraordinary vision is growing. No one knows the date of the harvest, but when it arrives, it is expected to usher in an era of unprecedented innovation and prosperity. Conclusion As 2023 comes to a close, Bitcoin’s outlook presents a series of promising developments, each of which brings a strong and optimistic outlook for the year ahead. From the expected influx of institutional investment to transformative regulatory changes and the milestone of Bitcoin’s fourth halving, the foundation is set for significant growth and wider adoption. Additionally, the evolving perception of Bitcoin as a secure, decentralized asset and the growing recognition that it is an environmentally and socially responsible option underscores its potential to transcend its current role in the financial sector. The potential of the character. The enthusiastic embrace of global leaders and innovative advances in technology only add to this narrative of progress and potential. That’s it for today’s article. Thank you for reading. I am an old leek in the currency circle. I sincerely wish you all to get rich in the currency circle. Your likes and attention are the motivation for my creation.

It’s hard to overstate the bullish outlook for Bitcoin in 2024. While many may feel like they’re already too late (why didn’t I buy under $100?) and like they’ve missed the boat, now may not be a better time to get in. More specifically, the ratio of potential rewards to the risk behind Bitcoin has never been more attractive. Here are 21 reasons to be incredibly bullish on Bitcoin in 2024.
need1. Multiple spot Bitcoin ETFs are expected to receive SEC approval in the coming weeks, bringing billions of dollars in additional demand as institutions can invest in the asset through traditional financial products. At the same time, ETFs are raising awareness of the asset and providing regulatory clarity as well as support from major financial institutions. This expectation is evidenced by the declining discount at which the Grayscale Bitcoin Trust (GBTC) trades relative to Bitcoin, from a nearly 50% discount last year to less than 10% in December 2023. In addition, this view is shared by countless analysts and asset managers who are closely related to the matter - their expectation that spot Bitcoin ETFs will be approved soon.
supply2. The fourth halving of Bitcoin supply is coming in April, and so far the asset’s price action (+150% YTD) is consistent with the previous three halving events, with post-halving returns of 101x, 30x, and 8x, respectively. Halving supply means that downward pressure on Bitcoin’s price will decrease, as miners will only sell half as many Bitcoins per day as they do currently (900 Bitcoins per day). It also triggers the next level of scarcity, as Bitcoin’s stock-to-flow ratio will suddenly double. Specifically, April 2024 will make history, as Bitcoin will become the world’s scarcest asset (the asset with the highest stock-to-flow ratio), replacing gold for the first time.
3. As more Bitcoin moves to wallets not controlled by liquidity owners, the liquidity supply decreases faster. Specifically, more Bitcoin is moving to private custody rather than being held and traded on exchanges. A decrease in liquidity supply means an increase in the multiplier effect of purchases: when one entity buys $1 billion of Bitcoin, Bitcoin's market cap increases by more than $1 billion because this purchase affects the price upward.
Supervision4. FASB, the entity that sets accounting and financial standards for U.S. companies, voted in September 2023 to adopt fair value accounting for Bitcoin. This change means that companies can hold Bitcoin on their balance sheets at market prices, allowing them to recognize unrealized gains without having to treat it as an intangible asset and follow an impairment model. This is a significant development because it opens up the possibility for companies to increase their reported earnings and equity when the Bitcoin they hold appreciates in value. This change makes holding Bitcoin more attractive to companies, not only because they can show more favorable financial results when Bitcoin rises, but also because the FASB move can be seen as legitimizing Bitcoin as an asset class.
5. In addition to regulatory progress supporting Bitcoin in 2023, the Satoshi Action Fund, a US nonprofit educational organization, expects to pass pro-Bitcoin regulation in 10 US states in 2024. Greater regulatory clarity will increase institutional investment, boost consumer confidence, and stimulate entrepreneurship in the Bitcoin space, further increasing demand and potential for the asset.
Fundamentals6. Adoption is increasing as the number of addresses holding 1 full Bitcoin has reached an all-time high. Similarly, addresses holding more than 0.1 Bitcoin and addresses holding more than 0.01 Bitcoin also show their highest levels ever.
7. Bitcoin’s hash rate has now reached an all-time high of 500 EH/s, cementing its position as the most secure network ever.
8. In contrast, Bitcoin's volatility tends to decline as the asset matures. Low volatility of an asset is particularly important for investors who focus on the ratio of return to volatility (such as the Sharpe ratio or the Sortino ratio). Bitcoin's high return and relatively low volatility enhance its appeal to investors.
9. In addition, Bitcoin's correlation with traditional asset classes has fallen to an all-time low. The low correlation with other asset classes makes Bitcoin an extremely attractive addition to any traditional portfolio (e.g., hedge funds, pension funds, family offices) as it enables asset managers to reduce the volatility of their portfolios while increasing expected returns.
10. The decentralization of Bitcoin mining is expected to increase. For example, thought leaders like Jack Dorsey invested millions of dollars in a decentralized Bitcoin mining pool called OCEAN. While this may be a small investment so far, the move at least puts the issue in the spotlight and invites other miners to follow suit. Further decentralizing the protocol can reduce its risk, making it more valuable.
11. Layer 2 solutions (such as the Lightning Network) finally become scalable, enabling Bitcoin to be used as a medium of exchange: nearly free, instant transactions. Specifically, Lightning Network adoption has increased 10x since the summer of 2021. With this new functionality, Bitcoin as an asset in 2024 will be very different (and superior) than Bitcoin as an asset in previous years.
12. Bitcoin balances on exchanges are declining as people understand the importance of self-custody. Personally, I think this development indicates less speculation in the market and a more genuine use of the asset as a decentralized store of value.
13. In November 2023, we set another new record: more than 70% of Bitcoin has not moved in more than 1 year. This development occurred despite the fact that the price of Bitcoin more than doubled during this period. This record once again supports the theory that speculation in the asset is decreasing and being replaced by long-term holdings.
Narrative14. The narrative around Bitcoin as an ESG asset is finally gaining recognition and starting to be addressed: from banking the unbanked to reducing methane emissions, incentivizing renewable energy production, and stabilizing the grid. This aspect of Bitcoin is increasingly being covered in peer-reviewed publications and traditional media, which could further fuel public interest in the asset.
15. Traditional investment managers have recently turned in support of Bitcoin. One of the biggest developments of 2023 has been Larry Fink’s 180-degree turn on Bitcoin. From calling Bitcoin a “money laundering index” in 2017, he now publicly supports Bitcoin and believes that Bitcoin’s recent price increase is a “shift to quality.” As the CEO and chairman of the world’s largest investment company BlackRock, his views are hard to ignore. Similarly, Jurrien Timmer, director of global macro at Fidelity, believes it is a “hedge against currency debasement” and “indexes gold.”
16. The distinction between Bitcoin and all other crypto assets is becoming increasingly clear: one is a commodity (an asset without an issuer), while almost all others are securities (not truly decentralized assets). With upcoming regulation likely to support this position, Bitcoin’s unique position will again stand out.
Cognition17. El Salvador, where Bitcoin is legal tender, had its credit rating upgraded by Standard & Poor’s in November 2023, indicating the early success of its Bitcoin strategy. Additionally, in December 2023, the value of Bitcoin investments in the country turned positive for the first time, after the asset experienced its longest bear market of two years of Bitcoin accumulation.
18. In addition, a libertarian economist who openly supports Bitcoin was elected President of Argentina in November 2023. Javier Milei’s videos have gone viral, denouncing the evils of socialist economies and fiat currencies. For example, his interview with Tucker Carlson in mid-September 2023 is one of the most viewed videos on the X platform, with more than 400 million views.
19. Multiple U.S. presidential candidates will make Bitcoin a topic in the 2024 election. Specifically, prominent candidates for the highest office in the United States who support Bitcoin include Ramaswamy, Kennedy, and DeSantis. These discussions will bring Bitcoin to the forefront and force all candidates to state their stance on the issue.
Beyond20. In November 2021, the integration of the Bitcoin protocol Taproot upgrade allowed the implementation of smart contracts directly on the Bitcoin blockchain. Taproot not only simplifies transaction efficiency, but also unlocks the potential to execute complex contract-like functions directly on the Bitcoin network, benefiting from its decentralization, security, and robustness. This advancement opens up new possibilities for decentralized finance (DeFi) and other applications. Such developments will begin to appear in 2023 and may become a major milestone in 2024.
21. In the coming wave of Bitcoin adoption, it may become clear that Bitcoin is more than just money. For example, when U.S. Major Jason Lowery released his bestselling book, Software Wars, earlier this year, it raised awareness of Bitcoin’s potential far beyond currency and financial markets. Specifically, Bitcoin’s security can be used not only for financial information, but also as a cybersecurity protocol, which could become a strategic imperative for national security in all countries. As Hal Finney published on December 5, 2010, “Bitcoin is a global, decentralized, and consistent database,” inviting readers to consider the many applications of such a database. While the idea is still in its infancy, the seeds have been sown and the extraordinary vision is growing. No one knows the date of the harvest, but when it comes, it is expected to bring an unprecedented era of innovation and prosperity.
ConclusionAs 2023 draws to a close, the outlook for Bitcoin presents a series of promising developments, each of which provides a strong and optimistic outlook for the year ahead. From the expected influx of institutional investment to transformative regulatory changes and the milestone of Bitcoin’s fourth halving, the stage is set for significant growth and wider adoption.
Additionally, the evolving perception of Bitcoin as a secure, decentralized asset and the growing recognition that it is an environmentally and socially responsible choice underscores its potential to extend beyond its current role in finance. The enthusiastic embrace by global leaders and innovative advancements in the technology only add to this narrative of progress and potential.
That’s all for today’s article. Thank you for reading. I’m Lao K in the currency circle. I’m an old leek who sincerely wishes you all can get rich in the currency circle. Your likes and attention are the driving force of my creation.

21 reasons to tell you: Why are you optimistic about the Bitcoin market in 2024?

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