Bitcoin’s (BTC:USD) performance in 2024 and over the past year has been impressive, up 18% and 122%, respectively. The Bitcoin outlook from most experts seems very positive for the remainder of 2024.
The trouble for investors who’ve yet to join the cryptocurrency club is whether their FOMO (fear of missing out) is warranted or merely an irrational thought.
Helping move things along for the world’s leading cryptocurrency are the 10+ bitcoin ETFs launched in mid-January. The first month of trading for these ETFs saw inflows of approximately $125 million… a day.
As Coindesk points out, all these new bitcoin ETFs brought in more than $11 billion, offset partly by a $6 billion outflow from the Grayscale Bitcoin Trust (NYSEARCA:GBTC). As of Feb. 15, the iShares Bitcoin Trust (NASDAQ:IBIT) has managed to gather more than $5.6 billion in net assets.
The general consensus is that once institutional money management jumps into the bitcoin ETF fray, demand will be good, but not spectacular. Once the major wealth management platforms join in,
“As firms begin covering the name, putting portfolio strategists to work determining allocations for different investor bases, the inflows are likely to exceed any ETF product before it,” Coindesk reported comments from Matt Sheffield, senior vice president of trading at FalconX, a large institutional digital assets broker.
With this step in the crypto journey yet to fully materialize and the general outlook for Bitcoin reasonably healthy, now would be a good time to buy if you’re bullish about the cryptocurrency’s future trajectory.
Here’s why.
The Dreaded Bitcoin Price Outlook
I’d be a liar if I said I knew the Bitcoin price in a year. I can’t even predict the 12-month price target for a company with reliable earnings. Predicting the future price of Bitcoin has always been a mug’s game, and yet so many do it.
USA Today covered the subject in late January. Numbers thrown out ranged from $70,000 to $148,000. However, some of the estimates extend beyond 2024. The authors were quick to point out that investors were wise to consider whether Bitcoin was a wise long-term investment for them rather than the near-term price in the next 12 months.
This is a smart recommendation, given that Bitcoin has no real purpose other than as a store of value. But I digress.
CNBC did a nice little roundup at the end of 2023. Their expert sources provided predictions varying from $60,000 to $500,000. It seems like a sure thing to make money on in 2024.
I like veteran portfolio manager Mark Mobius’ comments about his $60,000 prediction.
“‘No rationale for that prediction,’ Mobius said, except that a bitcoin ETF looks likely and ‘that has heightened interest’ in the cryptocurrency,” CNBC reported.
He’s 100% right. There is no fundamental reason for BTC to hit $60,000 by Dec. 31, other than the added interest caused by the new ETFs. When you think about it, with a finite supply and a halving in April, investors are rearranging the deck chairs, artificially pushing up demand.
Moving to the high-end of predictions, the venture capital firm CoinFund predicts BTC will hit somewhere between $250,000 and $500,000 in 2024.
“Bitcoin has a strong inverse correlation with the dollar and real yields, and both are now going down,” Seth Ginns, managing partner at CoinFund, told CNBC via email.
While you have to question the realistic nature of the prediction — Bitcoin has never traded over $65,000 in its history — at least Ginns provided a rational explanation why it might move higher over the next 10 months.
While price predictions are all over the map, there is no question that three things play into the eventual winner: the growth of bitcoin ETF net assets, the April halving, and lower interest rates. If all three of those positively impact demand, its November 2021 all-time high could be tested before New Year’s.
The Bottom Line
I’ve always disliked the idea of a Bitcoin outlook racket for cryptocurrencies. It’s so random given the lack of fundamental research available. The reverse of that, however, is that bitcoin and bitcoin mining very much resembles gold and gold mining, and you don’t hear much skepticism in the investment community these days around gold price predictions. It’s become standard fare.
Warren Buffett once said that if you added up all the gold in the world, it would amount to a cube 67 feet on a side. You’d have it in your backyard and all you could do with it is stare at it. Absolutely no utility.
And we know what the late Vice Chairman, Charlie Munger, thought about Bitcoin.
“I don’t welcome a currency that’s so useful to kidnappers and extortionists and so forth. Nor do I like shuffling out a few extra billions and billions of dollars to somebody who just invented a new financial product out of thin air,” Benzinga reported Munger’s past comments after his passing in November.
Two of the smartest men to walk the planet took issue with Bitcoin. If you’re going to focus your attention on price predictions, you probably shouldn’t own the cryptocurrency.
Having said that, the tea leaves point to a strong year for bitcoin in 2024.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
