The biggest digital asset has jumped 70 per cent since December 31 in a partial comeback from a massive rout last year

Bitcoin’s bounce back is just the beginning of a rally that will take it beyond $50k in 2024 because of a process called halving that restraints the supply of new tokens, as per estimates from crypto analysts.

The biggest digital asset has jumped 70 per cent since December 31 in a partial comeback from a massive rout last year. While the token is struggling around $30k at present, halving has the potential to spark a gain of no less than 78 per cent, as per Bloomberg Intelligence and Matrixport.

A halving cuts in half the amount of tokens that Bitcoin miners get as reward for their work. The four-yearly event is due next around April 2024 and is part of the process of limiting Bitcoin supply at 21mln tokens. The coin hit record levels after each of the past three halving.

The forthcoming halving is presently 50 per cent priced in based on earlier cycles, according to Jamie Douglas Coutts, a Bloomberg Intelligence analyst. Coutts forecasts that Bitcoin can scale $50k by April 2024.

Bitcoin cycles bottom nearly 12-18 months prior to the halving and this cycle seems like the earlier ones, although many things have changed — while the network is vastly stronger, Bitcoin has never undergone an extended severe economic shrinking, Coutts stated.

The Bitcoin rebound has sputtered of late, restricted by cooling expectations of Federal Reserve interest rate cuts amid continuing inflation. A US regulatory clampdown on crypto in the wake of FTX collapse in November last year also imperils the market outlook.

If FTX’ collapse was actually the bottom of this cycle, then history would suggest that we still have nearly 350 days of ‘accumulation’ before seeing the typical post-halving breakout price action, stated Jacob Joseph, an analyst at CCData.

Markus Thielen, research head at Matrixport, stated in a recent note that Bitcoin will hit nearly $65,623 by April 2024 — more than double the current price.