ETFs, Halving, Upgrades – What to Expect With Bitcoin Next Year

As usual, the price of Bitcoin was a big story, and in 2023 it was good news. Bitcoin is once again the best-performing asset class, beating stocks, bonds, and gold by a wide margin. As of today, the price is up more than 150% since the beginning of the year.

This post is part of CoinDesk's "Crypto 2024" predictions package.

2023 marked a tremendous surge in institutional interest, highlighted by BlackRock’s application for an ETF in June. There are currently as many as 12 open applications, including those from Invesco, ARK, Fidelity, VanEck, and Franklin Templeton. Although the SEC refused GBTC’s application, a court ruled that the SEC’s reasoning for doing so was invalid. Even just a rumor of approval in October sent Bitcoin’s price skyrocketing.

The energy used to mine and secure Bitcoin also saw significant growth, with the mining hashrate up 100% from 240 exahash to 482 exahash year-to-date. The hashrate is the measure of how many calculations per second are required to add another block of transactions to Bitcoin’s ledger an average of once every ten minutes. Bitcoin continues to leap ahead as the most secure and reliable digital system in the world. Network uptime was 100% for the 14th straight year. 2023 also saw much more widespread recognition that Bitcoin’s relationship to energy and the environment is overwhelmingly positive, contributing to electrical grid stabilization and creating economic incentives to mitigate carbon emissions.

Looking forward to 2024, one thing that’s certain to happen is the next “halving,” when the new issuance of Bitcoin will be cut in half at block 840,000, which is expected to be mined in late April. Despite growing demand for Bitcoin, the supply added per block will nevertheless be reduced by 50%. This will be the fourth halving in Bitcoin’s history. Historically, a bull market has followed halvings. Whether causation or anomaly, it's true until it's not, and we plan Swan's strategy incorporating a high probability of a bull market in 2024 and 2025.

In addition, it is almost certain that we will see the approval of one or more spot Bitcoin ETFs. This would open up floodgates of capital currently in traditional investment channels. The consensus is that this is most likely to happen in January.

Bitcoin's technology trends in 2023 included the continued impact of the Taproot upgrade, enhancing transaction efficiency and privacy. The Lightning Network's maturation underscored Bitcoin's ability to scale by adding layers on top of the Bitcoin protocol to facilitate faster, more economical transactions. Lightning infrastructure has come a long way, with scores of lightning-enabled wallets, on-demand Lightning nodes, and facilitating an estimated 200,000 transactions per day. It will be interesting to watch what this more mature Lightning Network will do in the sustained high-fee environment of another bull market.

In 2024, amid global financial uncertainty, Bitcoin's stability could attract attention from individuals, institutions, and governments seeking to reduce chaos. Bitcoin is reaching record values against weak currencies, gaining support from global politicians, and being used more by people and businesses worldwide. Bitcoin's growth is natural, without central control, and driven by millions of people worldwide who recognize its benefits. Bitcoin safeguards global monetary integrity, and sound money is a fundamental human right.