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2024 has been a historic year for Bitcoin (BTC).
After finally getting the much-coveted exchange-traded funds (ETF) wrapper in January, Bitcoin (BTC) scaled new all-time highs of over $73,000 in March.
The following month, Bitcoin completed its fourth halving cycle.
Despite seeing sell pressure from governments dumping confiscated BTC and the release of nearly $9 billion worth of BTC from defunct Tokyo-based exchange Mt. Gox, Bitcoin endured to keep the crypto bull run alive.
How long will the Bitcoin bull run last? Let’s find out.
Key Takeaways
- The U.S. Federal Reserve rate cut cycle is expected to define the length of the 2024 Bitcoin bull run.
- November 2024 U.S. Presidential elections will directly affect the state of crypto markets in 2025.
- Trump has promised to create a “strategic national bitcoin stockpile” and fire U.S. SEC Chair Gary Gensler “on Day One.”
- Harris’s stance on crypto remains unclear. Experts remain pessimistic.
- Polymarket predictions showed Trump’s odds of winning at 52% as of late August 2024.
State of the 2024 Bitcoin Market: Bitcoin Comes of Age
Bitcoin’s maturity has been a key theme of the 2024 BTC bull run. This maturity could define how long the price appreciation will last and how low BTC prices will drop when the next crypto bear market arrives.
By maturity, we are primarily talking about Bitcoin’s growing acceptance among institutions and governments.
In the first quarter of 2024, U.S. pension fund manager State of Wisconsin Investment Board (SWIB) revealed a $162 million stake in spot Bitcoin ETFs. Later, the third-largest pension fund in the world, South Korea’s National Pension Service, revealed an indirect Bitcoin bet by acquiring a $34 million stake in MicroStrategy, the world’s largest corporate holder of Bitcoin.
If there were any doubts about Bitcoin’s stature as the premier cryptocurrency, the crypto bull run of 2024 has quelled it.
A side-effect of Bitcoin’s new-found maturity is its increased sensitivity to macroeconomic forces.
On August 5, 2024, the crypto market plunged alongside global equities on U.S. recession fears and the unwinding of the Japanese Yen carry trade. Although BTC briefly dropped below the $50,000 mark, buy-the-dip investors quickly pumped Bitcoin prices to over $60,000 within three days of the crash.
Following the brief downturn, research firm Glassnode noted the current cycle had a “more patient and resilient holder base.”
Glassnode added that the 2024 Bitcoin bull run had an “elevated percentage” of long-term Bitcoin holders compared to previous cycles.
How Long Will 2024 Bitcoin Bull Run Last?
The length of the 2024 Bitcoin bull run could be defined by the upcoming U.S. Federal Reserve rate cut cycle and the November 2024 U.S. presidential election.
Rate Cuts to Whet Risk Appetite
After seeing steep rate hikes over the past two years, the U.S. Federal Reserve looks increasingly likely to start cutting rates from September 2024.
Rate cuts are seen as bullish events for risk asset markets.
In theory, lower borrowing costs should boost hiring and spending and increase risk-taking among investors.
The reality, however, is not straightforward. An increasing number of market experts believe that the Fed may have made a policy error in keeping rates high for longer than needed. Now, fears of a U.S. recession are taking the spotlight away from lowering borrowing rates.
Crypto asset manager CoinShares’ survey of professional investors revealed that 36% of the respondents said that the Fed has made a policy error.
“Recent hawkish comments from the Fed are likely why we have seen a pause in digital asset price appreciation,” added CoinShares.
However, Arthur Hayes, co-founder of crypto exchange BitMEX and former investment banker, remained positive and said that the upcoming liquidity boost could take Bitcoin to as high as $73,700.
With that, the U.S. Fed is almost certain to begin cutting interest rates in September 2024, Hayes added:
“That is going to create a glorious bull market in all types of risk assets, including crypto, all in time for the election.”
U.S. Presidential Elections: Trump vs Harris
The U.S. presidential election is arguably the most important crypto event of the year, and it will define the state of the crypto market in 2025.
In one corner, we have crypto’s latest white knight, Donald Trump, who recently pledged his support for the crypto industry.
Trump’s promises were music to the Bitcoin community’s ears. They included creating a “strategic national Bitcoin stockpile” and firing U.S. Securities and Commission Chair Gary Gensler “on Day One.”
On the other corner is the current U.S. Vice President (VP) Kamala Harris, whose presidential nomination looks to have turned the tide for the Democratic Party.
Since President Joe Biden withdrew his reelection bid and Harris declared her candidacy on July 21, 2024, Trump’s odds of winning have fallen from a high of 72% to 53%, as of August 22, 2024, on crypto prediction platform Polymarket.
Harris’ stance towards the crypto industry remains unclear. She has not yet embraced the industry with open arms like Trump.
CoinShares noted that neither Harris nor her VP-elect Tim Walz attended a virtual town hall named ‘Crypto4Harris’ when Chuck Schumer, New York’s Democratic Senator, announced that he would push to pass a crypto bill through the Senate before the end of 2024.
“Neither Harris nor Walz attended the call, nor did any senior campaign officials, which, in our opinion, reflects the Harris administration’s stance on crypto going forward. There is further evidence suggesting a potential crackdown on crypto under a Harris presidency, as she has hired Deese and Ramamurti — two former Biden economic aides known for their anti-crypto views,” added CoinShares.
If Trump wins his second term as president, the 2024 Bitcoin bull run is most likely to extend into 2025 on expectations of favorable regulations toward the crypto industry. The same cannot be said for a Harris win.
Looking back: Historical BTC Bull Cycle Movements
While past market performance is no guarantee of future returns, history often rhymes, and therefore it is important to study historical BTC price movement, especially when past halving events have ushered Bitcoin bull runs within the next 12 to 18 months.
A look at historical BTC/USD charts showed that Bitcoin’s price did not break out immediately after halving events. Following past halving cycles, Bitcoin has shown a tendency to trade range-bound during the early innings and exhibit volatile market moves before breaking out into a bull run.
Bear in mind that newly minted coins first hit the coffers of Bitcoin miners. Bitcoin mining is a capital-intensive operation that forces miners to sell a chunk of their BTC holdings to cover operational expenses. Therefore, the circulating market supply of BTC may not shrink immediately following the halving.
A brewing phase can be expected in 2024 when the mining community adjusts to the reduced mint supply,?and periodic price spikes reignite investors’?fear of missing out (FOMO).
Now let’s look at data from Glassnode to learn how BTC performed following past halving events:
- First halving cycle (November 2012 – July 2016) – BTC posted a max return of +5315% and a max drawdown of -85%
- Second halving cycle (July 2016 – May 2020) – BTC posted a max return of +1336% and a max drawdown of -83%
- Third halving cycle (May 2020 – April 2024) – BTC posted a max return of +569% and a max drawdown of -77%
Glassnode said: “The price performance of Bitcoin across various halving epochs is very widespread, and we argue the earlier epochs are too different from today to be much of a guide. We do see both diminishing returns and a shallower total drawdown effect over time, which is a natural result of the growing market size and the scale of capital flows required to move it.”
Looking Forward: Bitcoin Outlook for 2028
In one of his weekly memos in April, Bitwise CIO Matt Hougan penned his thoughts on five predictions to expect by the next Bitcoin halving in 2028.
- Bitcoin’s volatility will decline by 50% as the crypto becomes more institutionalized. The emergence of the spot BTC ETF is a primary driver of this trend.
- As a result of lower volatility, investors will consider it “normal to have 5% or more of your portfolio in Bitcoin.”
- Spot BTC ETFs will draw over in over $200 billion.
- Central banks will add Bitcoin to their holdings.
- Bitcoin price prediction for 2028 is above $250,000.
The Bottom Line
We will end this article by reminding readers that financial markets are unpredictable. Experts can be wrong in their Bitcoin price predictions.
Therefore, it is important to do your own due diligence before investing and never invest more than you can afford to lose. The chaotic price movements can humble even the smartest and most experienced players.
