Bitcoin Hits 2-Year High, Surpasses $57,000 Mark for First Time Since 2021

The rally began on Monday (Feb 26) morning in the US and saw Bitcoin taking out $53,000 for the first time since 2021.

PUBLISHED FEB 28, 2024

Digital Cryptocurrency Bitcoin | Getty Images | Photo by Chesnot

Like other US stocks, Bitcoin started the new year with a bang, hitting a two-year high. Bitcoin (BTC) crossed $57,000, the highest since 2021 before coming down, as per Coindesk. For this year, the cryptocurrency is up nearly 30%, but remains below its all-time high of $67,352.59 in 2021. At press time, the currency was down to $56,500, which was still ahead more than 9% over the past 24 hours.

Bitcoin is displayed in front of a Bitcoin course's graph | Getty Images | Chesnot — Bitcoin | Getty Images | Chesnot

The rally began on February 26 and saw Bitcoin taking out $53,000 for the first time since 2021. The price then rose above $54,000 later in the day. This boost results from the launch of exchange-traded funds that invest directly in the cryptocurrency. This has made retail investors invest in the asset easily.

Last year, we saw the crypto market rise by 16,000% and even blue-chip crypto coins like Bitcoin and Ethereum surged by 160% and 90%, respectively. Experts say that the world will continue to see the value of Bitcoin go up and a part of the reason is that the 'halving' event is scheduled to happen.

"One of the most important features of Bitcoin is its limited supply and issuance mechanism,” says Bruce Fenton, CEO of fintech company Chainstone Labs, via Forbes. This event is responsible for controlling the supply of new Bitcoin. This is one of the reasons why Bitcoin is the most popular cryptocurrency. At the moment, Bitcoin has a halving rate of less than 2%, which is set to decrease with further halvings.

"Bitcoin’s production scarcity is what defines its finiteness, and when reward goes down, supply is constrained,” says Chris Kline, chief operating officer of Bitcoin IRA. “Increasing demand at a time when supply is constrained has a positive impact on price, which can make Bitcoin alluring to investors," he adds.

According to the Bitcoin algorithm, halving has to happen based on certain creation of blocks. While nobody can tell exactly when the next 'halving' will occur, experts say that it will take place sometime in May 2024. "Historically, there is a lot of Bitcoin price volatility leading up to and after a halving event. However, the price of Bitcoin typically ends up significantly higher a few months after," says Rob Chang, CEO of Gryphon Digital Mining.

The first bitcoin halving occurred in November 2012 and the next halving took place in 2016. So we do know that there's always a four-year gap between each event. After the first halving, the coin jumped from $12 on November 28, 2012, to a price nearly 100 times— $1,164, all in one year.

Does this mean that the value will continue to rise even after halving? As we know, demand plays a huge role in balancing the supply reduction in a commodity and therefore, the value may continue to rise. “Unlike the previous halving, we are currently seeing institutional growth because of the recently-approved ETFs, which is bringing new sources of demand,” analysts at BitOoda, a fintech platform noted.

This is mostly why experts believe that Bitcoin will only continue to rise in the coming year. As per CoinDCX, the value of the coin could reach $60,000 in 2024, $65,000 in 2025, and $90,000 by 2027.