Asset management firm Ark Invest has highlighted four major catalysts that will drive the price of bitcoin in 2024. In its Big Ideas 2024 publication, Ark Invest described how bitcoin has evolved from a speculative instrument to a strategic investment in institutional portfolios. This shift in perception is expected to shape the future of bitcoin.
The first catalyst mentioned is the launch of spot bitcoin exchange-traded funds (ETFs) in January. These ETFs, which are traded on major stock exchanges, make it easier for investors to buy and sell bitcoin shares through their existing brokerage accounts. This will reduce the complexity associated with direct investments in bitcoin.
The second catalyst is the upcoming Bitcoin halving, which is set to occur in April. Historically, each halving event has marked the beginning of a bull market for bitcoin. The next halving will reduce bitcoin’s inflation rate from approximately 1.8% to 0.9%.
The third catalyst is regulatory developments in the cryptocurrency industry. Recent events, such as the bankruptcies of FTX and Celsius, have prompted a push for more transparent and open global crypto regulations. This includes potential legislation in the United States and Europe that would establish regulatory frameworks for cryptocurrencies.
The fourth catalyst identified by Ark Invest is institutional acceptance of bitcoin. The firm noted the shift in perception of bitcoin from a speculative instrument to a strategic investment in a diversified portfolio. This change in attitude is exemplified by the CEO of Blackrock, Larry Fink, who has shifted his stance from bitcoin skepticism to recognizing its potential as a “flight to quality.” Blackrock was one of the firms that launched a spot bitcoin ETF in January.
Overall, Ark Invest believes that these four catalysts will contribute to the continued growth and adoption of bitcoin in 2024. The firm’s CEO, Cathie Wood, has stated that spot bitcoin ETFs are expected to attract substantial institutional flows, which will drive the price of bitcoin higher.