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Bitcoin Market Outlook 2024: Aiming for the Moon

January 11, 2024

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Bitcoin had an excellent 2023. The cryptocurrency generated a return of over 154%, making it one of the best-performing assets of the year. 

The world’s leading crypto asset showed resilience after the crypto market crash following the collapse of FTX in late 2022, highlighting once again that Bitcoin and its community of builders, entrepreneurs, and investors are unstoppable. 

If 2023 was the year of the Bitcoin comeback, I believe 2024 will be the year where we’ll see a new adoption wave driven by significant investor interest from Wall Street.

Now that we finally have spot Bitcoin ETFs in the US, a much wider range of investors will enter the Bitcoin market, most notably institutional investors, which has the potential to push the price of Bitcoin to never-before-seen highs. 

In addition to the Bitcoin ETF, I believe that the Bitcoin halving will be another significant factor for the price of Bitcoin this year, as halving events have historically resulted in market rallies in the months to follow. 

I also think there will be a significant perception change towards the Bitcoin mining industry, increased adoption of Bitcoin layer-2 protocols, and an increase in real-world asset tokenization. 

Continue reading to get the inside scoop on each topic and how I think it will affect the ecosystem in 2024. 

Spot Bitcoin ETF Approval & Bitcoin Halving Will Push New All-Time High Incoming

The new spot Bitcoin ETFs will undoubtedly be the biggest news and adoption driver in 2024. They will enable a regulated way for all types of traditional investors to invest in Bitcoin.

As someone working in the industry, I have seen firsthand the massive shift in interest in Bitcoin. 

Long gone are the days when it was dismissed as fun internet money. Major investors and companies are interested and want direct exposure. The ETFs that have just been approved will allow for that, potentially becoming a giant catalyst for institutional Bitcoin adoption.

However, the launch of Bitcoin ETFs is not the only major event in 2024. We have another Bitcoin halving ahead of us! 

Historically, block reward halvings have been positive for the Bitcoin price, as it skyrocketed months later. Combine that with the potential wall of money that could flow into Bitcoin through the newly launched ETFs, and I think we have a viable case for a new all-time high.

I’m incredibly bullish on Bitcoin in 2024, and with these two events, I’m already excited to see the next bull run!

Bitcoin Transaction Fees Will Rise As Ordinals & Bitcoin Tokens Boom Continues 

If you’ve been in the Bitcoin ecosystem long enough, you would know that on-chain fees for Bitcoin transactions will increase as more people use the network. Fees increase as miners are incentivized to add transactions with the highest fees to each block, creating competition for block space. 

In light of Bitcoin’s user adoption rate so far, the Bitcoin industry had a pretty good grasp on what to expect to pay in terms of fees in the coming years. However, the introduction of Ordinals and Bitcoin-native tokens has changed the transaction fee landscape significantly in 2023. 

The Ordinals Protocol, which was launched in January 2023, allows anyone to inscribe data into an individual satoshi, creating a new type of on-chain NFT on Bitcoin. This sparked a boom in Bitcoin NFTs but also the development of fungible tokens running on the Bitcoin network. 

All this new on-chain activity has caused prices to spike in 2023 as more block space is being used up by data being inscribed onto satoshis. I expect this increase in on-chain transaction fees to continue to rise as the popularity of Bitcoin Ordinals and Bitcoin-native tokens is clearly growing. 

While Ordinal inscriptions make using the Bitcoin network more expensive, they show that Bitcoin is more than “just” digital money and a store of value. 

While Bitcoin remains an open monetary network that allows anyone to send, receive, and store value, it also provides the infrastructure for builders who want to develop decentralized products and services built on the most secure blockchain network in the world.  

I believe that the “building on Bitcoin” movement will bring more developers and users back to Bitcoin who have been building on other blockchain networks. With that adoption, we’ll also see an increase in fees. 

Luckily, we already have excellent Bitcoin scaling solutions to enable us to continue to send Bitcoin across the globe at high speeds and at almost no cost. 

Bitcoin Layer-2 Protocol Will Experience Substantial User Adoption 

With increasing on-chain fees, the demand for layer-2 protocols and scaling solutions will also increase. 

We’ve already seen this with Lightning Network adoption for several years now and, more recently, with increased activity on the Liquid Network, a sidechain solution. 

Both offer specific use cases that allow users to reduce fees, send and settle transactions faster, and decrease stress on the main Bitcoin network. Like in any market, the users will naturally head that way if there is a demand for better solutions. This will also happen with layer-2 solutions in 2024. 

We’ve already seen improvements in wallets, specific implementations of the protocol, and more commitments by investors for start-ups in the industry. The more we see this happening in 2024, the better. While we’ve seen very little growth before 2020 among Bitcoin scaling solutions, the number of these protocols exploded in the past years, and 2024 will be a kickstarter for a major adoption wave. 

I’m very excited about the Lightning Network. Not only does it allow you to send Bitcoin around the globe in seconds, but also because it can be a bridge for further tokens. But I am also looking at other layer-2 protocols, as this space is incredibly exciting. 

Bitcoin Mining Will Be Widely Acknowledged As A Green Industry 

One of the last points of criticism that Bitcoin faces is the high energy consumption of the Bitcoin mining industry. There is no debate that you need a lot of energy to run a profitable mining operation. 

So far, the Bitcoin community had to defend itself against poorly researched mainstream coverage. All of these media outlets either used outdated research or stated wrong “facts.” 

However, 2023 was the year where we saw a significant perception change in the media world. 

Not only are we seeing increasingly more favorable coverage, but also excellent research papers by major institutions. Fidelity was one of the first Wall Street institutions to acknowledge the positive impact the mining industry can have on the environment. In 2023, we also saw other institutions like KPMG and BlackRock coming to the same conclusion. 

Bitcoin mining companies are incentivized to find the cheapest energy source available, and those energy sources are almost always renewable, clean energy. 

The mining industry has already realized this, and we saw a significant shift towards these energy sources in 2023. Innovations around using renewable energy sources or capturing wasted energy to mine Bitcoin are on the rise, making the Bitcoin mining sector an increasingly “green” industry. 

According to estimates from the Bitcoin Mining Council, over 60% of the energy used in Bitcoin mining comes from renewable sources. I expect this number to increase in 2024 because it simply makes sense to find the cheapest energy sources to mine Bitcoin. 

As we see more and more media coverage acknowledging the green push in Bitcoin mining, the sentiment towards Bitcoin mining could (finally) swing to acknowledge it as a pioneer in the development of green energy solutions and consumption. 

Real-World Asset Tokenization Will (Finally) Take Off 

Asset tokenization brought me into this industry a few years back, so I am excited to see an increase in interest in real-world asset tokenization. 

Real-world asset tokenization refers to the tokenization of assets, turning them into tradable tokens on a blockchain. Real-world assets include many things, from real estate and financial securities to certificates for fine art. 

People have discussed the possibilities of doing this for a long time, but very few projects have succeeded or stopped innovating. But I believe that 2024 will be the year where we’ll see significant adoption, mainly because the technology is now ready and the demand for such solutions is here, especially from institutional investors seeking to bridge the gap between the physical and digital world. 

I believe that all assets will eventually be tokenized. 

This will happen on blockchains like Ethereum first, but eventually, we will also see this happening on Bitcoin layer-2 protocols as it makes sense to create tokenized assets that are secured by the most decentralized blockchain network in the market. 

2024 will be an exciting year for all of us in Bitcoin. I can’t wait to see how it all unfolds! 

Patrick Lowry
CEO Samara Asset Group