3 Reasons Bitcoin Could Bounce Back in the Second Half of 2024

So far in 2024, Bitcoin (CRYPTO:BTC) has gained a whopping 47%, so it might seem a bit strange to talk about Bitcoin rallying in the second half of the year.

But here’s the thing — since Bitcoin reached a new all-time high of $73,750 in March, the world’s most popular cryptocurrency has traded largely sideways or down. At one point, Bitcoin even dipped below the $54,000 level, and some feared it could fall below $50,000. But there are three very good reasons why Bitcoin could regain its bullish momentum in the coming months.

Bitcoin halving

When the Bitcoin halving occurred on April 19, many crypto investors assumed that the price of Bitcoin would skyrocket immediately. However, this was not the case. On the contrary, the opposite happened. As a result, some people gave up on the anticipated halving boost altogether.

But I think that would be a mistake. For example, consider what happened during the previous Bitcoin halving cycle in 2020. It took almost five months for the halving to kick in and that’s when Bitcoin went parabolic. It skyrocketed from a price of $10,000 in October 2020 to $65,000 in April 2021. While past performance is no guarantee of future performance, there’s certainly still time for a Bitcoin halving to repeat a similar pattern.

Spot Bitcoin ETFs

It’s not time to give up on the price-boosting power of spot Bitcoin ETFs. In the first few months of the year, new exchange-traded funds (ETFs) were all the rage. But then came a cooling period in May and June, with many assuming the massive inflows of investor capital were over.

Image source: Getty Images.

But that has not been the case at all. If you look at investor inflows in July, you can see this clearly. Inflows have been positive for four weeks and show no signs of stopping in August.

In fact, there’s reason to think that the next crop of institutional investors, led by pension funds, endowments, and sovereign wealth funds, are about to fill the void. If they do, a sustained comeback could be on the cards as this new source of money flows into Bitcoin.

New political momentum

Finally, there’s the issue of political momentum. There’s growing support for Bitcoin from high-profile lawmakers and political candidates, and that should ring a bell with crypto investors. The best example is former President Donald Trump, a former Bitcoin skeptic turned self-proclaimed Bitcoin supporter. At the Bitcoin 2024 event in Nashville in late July, he went so far as to propose the creation of a strategic Bitcoin reserve for the U.S. government.

And Trump is not alone among high-profile politicians. Independent politician Robert F. Kennedy, Jr. has also emerged as a Bitcoin supporter, and U.S. Senator Cynthia Lummis (R-Wyoming) has proposed a new plan for the U.S. Treasury Department to buy 1 million Bitcoins, which would be worth about $66 billion at today’s prices. Don’t you think this will help boost the price of Bitcoin?

But remember that public sentiment around crypto can be very volatile. All it takes is one bad headline and a lot of positive support in Washington, D.C., can dry up overnight. And even the best-intentioned campaign promises can be worthless if a politically divided nation can’t agree on anything.

How high can Bitcoin go?

However, there are reasons to think that Bitcoin could experience a definite recovery in the second half of the year, with investment firm Bernstein, for example, insisting that Bitcoin could reach $200,000 sometime in 2025.

This price target may seem overly optimistic to some, but there are a number of positive factors lining up for Bitcoin. There’s still time for the halving to play out, investor flow into new spot Bitcoin ETFs continues, and political momentum is building. As long as all of these catalysts hold true, Bitcoin has nowhere to go but up.

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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in Bitcoin and recommends Bitcoin. The Motley Fool has a disclosure policy.

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