October 2024 has been a rewarding month for bitcoin (BTC) investors as the world’s leading cryptocurrency by market cap approached its all-time high of $73,750, set on March 14 this year. Here’s a comprehensive look from the Itez editorial team at the key factors driving bitcoin’s growth and when we might expect its next cyclical peak.
Why is bitcoin rising? — 3 key drivers
Bitcoin’s strong performance this fall stems from a combination of factors that have created ideal conditions for upward momentum. Let’s break down the main drivers that have pushed BTC close to its all-time high (ATH).
1. Optimism around the U.S. presidential election
In the U.S., the presidential race between former President Donald Trump and Vice President Kamala Harris has brought bitcoin into the political spotlight. Both candidates have appealed to the crypto community, recognizing that the votes of crypto investors could be pivotal in the election outcome.
Trump is particularly popular among crypto advocates due to his pro-industry initiatives, aimed at establishing a clear regulatory framework and supporting crypto participants. As of now, prediction markets estimate his chance of winning at nearly 70%.
2. Anticipation of further Federal Reserve rate cuts
In September 2024, the U.S. Federal Reserve (Fed) cut interest rates for the first time in 4.5 years. Fed Chair Jerome Powell has hinted that additional cuts may follow, a move that could support further investment in assets like bitcoin.
The Fed’s key interest rate influences borrowing costs for banks and, indirectly, for consumers and investors. When the rate is high, the dollar strengthens, and holding savings in USD becomes more attractive. However, a rate cut reduces the purchasing power of the dollar, prompting investors to seek alternatives, including cryptocurrencies. Currently, 100% of market analysts expect further rate cuts, with 98% predicting the rate will fall to a range of 4.5-4.75%. The Fed’s next rate decision is set for November 7.
3. The impact of bitcoin’s halving event
Bitcoin’s most recent halving, which occurred on April 20, 2024, cut the rate of new coin production by half, reducing the monthly influx of new BTC by 50%. Halving events are known to create supply shortages, which historically drive bitcoin’s price higher.
A popular “rainbow” chart illustrates how halvings have impacted bitcoin’s price over time, with colored bands indicating whether BTC was historically expensive (red-orange) or undervalued (purple-blue). These halvings often precede cyclical peaks, typically occurring about 530 days after each halving. Based on this pattern, bitcoin’s current growth cycle may still be unfolding, with an all-time high potentially on the horizon in autumn 2025.
Interest in BTC-ETFs — exchange-traded funds that track bitcoin’s price — has further contributed to a supply shortage. BTC-ETFs have opened crypto investments to institutional investors, whose increasing interest is evident from the growing inflows into bitcoin funds. As a result, ETF issuers need to acquire BTC for their funds, which supports bitcoin’s price growth.
Outlook
Bitcoin appears well-positioned to continue its upward trend, following the historical price patterns that often play out after each halving. If history repeats itself, BTC may achieve its next cyclical peak in autumn 2025.
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This article is not investment advice or a recommendation to purchase any specific product or service. The financial transactions mentioned in the article are not a guide to action. It’s not intended to constitute a comprehensive statement of all possible risks. You should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about making any operations with cryptocurrency.
