Research from a top cryptocurrency analysis entity suggests a strong likelihood of Bitcoin reaching unprecedented highs in the next half-year. Lucas Outumuro, the head of research at the firm, posits a robust 85% probability of Bitcoin achieving new highs, citing five primary elements expected to boost the value of this leading digital currency in the near term.
Halving Event to Propel Bitcoin’s Value
Outumuro points to the much-awaited Bitcoin block reward halving, slated for April, as a principal factor. This quadrennial occurrence slashes miners’ BTC rewards by half and could propel Bitcoin’s value to new heights a month post-halving. He believes miners are ready for the upcoming reduced rewards and implies that the halving could significantly curb Bitcoin’s inflation rate from 1.7% to 0.85%, easing downward pressure on its price.
The anticipation surrounding this event is bolstered by a predicted decrease in Bitcoin’s inflation rate following the halving, which could mitigate Bitcoin’s selling pressure and support its positive price momentum.
Additional Factors Influencing Bitcoin’s Trajectory
Moreover, the introduction of spot Bitcoin ETFs represents another potential price booster, with these funds having drawn about $4 billion in new investments shortly after their inception. This surge in capital coincides with a reduction in Bitcoin’s new supply post-halving, potentially driving up demand.
Interest rate cuts by the Federal Reserve are also expected to contribute to Bitcoin’s ascent. Market participants speculate that the Fed will soften monetary policy, which traditionally benefits Bitcoin and other similar asset classes by reducing borrowing costs and enhancing market liquidity. Outumuro also notes the potential economic stimulus from the Fed in the lead-up to the U.S. presidential election, which could have positive knock-on effects for Bitcoin’s valuation.
Lastly, Outumuro foresees an increase in corporate Bitcoin acquisition, particularly as spot ETFs make it more accessible to institutions. He anticipates that hedge funds and companies across Asia and South America may emulate U.S. firms in incorporating Bitcoin into their financial reserves, especially given the recent legitimization of spot Bitcoin ETFs.