“Bitcoin Overvaluation in 2024: What Effects on the Cryptocurrency Market?”
Fred Thiel: Is Bitcoin Overvaluation in 2024 Already Priced In?
According to information provided by CEO of Marathon Digital, the largest Bitcoin miner in the USA, Fred Thiel, the upcoming devaluation of Bitcoin predicted for the year 2024 may already be factored into the current price of the cryptocurrency. What are the reasons and effects of this forecast?
Bitcoin Value Surge Due to ETF Funds
The increase in the value of Bitcoin by over 60% in 2024 is attributed to the success of the American introduction of Exchange-Traded Funds (ETFs). The popularization of investments through ETF funds attracted capital to the market, likely causing a shift in price growth by the typical three to six months after the devaluation of Bitcoin, as noted by Thiel.
Effects of Devaluation on Miner Rewards and Bitcoin Supply
The upcoming devaluation of Bitcoin has the potential to reduce miner rewards by 50%, affecting the amount of Bitcoin introduced into circulation. However, according to data from the analytical firm CryptoQuant, the impact of devaluation on the price of Bitcoin may be less dramatic than expected. Increased selling from long-term investors could overshadow the decreased supply of newly mined Bitcoin.
The Role of Large Investors (“Whales”) in Price Direction Post-Devaluation
Data indicates that large investors, holding significant reserves of Bitcoin, may play a crucial role in determining price direction after the devaluation. Previous devaluations of Bitcoin resulted in price increases due to demand outstripping supply. Nevertheless, the current situation in the cryptocurrency market, due to the introduction of ETFs, increased demand from large investors, and existing supply-demand disparity, may undergo changes.
In conclusion, the devaluation of Bitcoin in 2024 sparks various speculations and analyses regarding potential effects and market reactions to this change. It is important to be aware of the factors influencing cryptocurrency prices and to monitor the situation’s development to make informed investment decisions.
