Bitcoin (BTC-USD) has faced its share of volatility this year amid broader macroeconomic uncertainty. However, zooming out, BTC has shown impressive resilience in 2023 compared to past drawdowns. While risky assets plunged, Bitcoin rallied off its lows and broke back above $35,000 this summer. Now, with BTC back under $35K after failing to hold that level as support, smart crypto investors have an opportunity to accumulate for the long term.
Of course, trying to time short-term moves is challenging. Therefore, my focus is on the bigger picture bullish case for Bitcoin as we look ahead to 2024 and beyond. In my opinion, two key catalysts make this an opportune time to buy Bitcoin for the long-term, despite recent weakness.
Catalyst 1: The Next Bitcoin Halving
The first catalyst is Bitcoin’s upcoming halving event, expected sometime in Q2 2024. Historically, halvings have been very bullish for BTC price action. With the block reward cut in half, new supply coming to market decreases. Typically, this supply shock leads to renewed rallying and shakes out the weak hands.
Therefore, with the next halving likely less than 6 months away, accumulating Bitcoin at under $35K could be a savvy move before upside momentum builds. Naturally, past performance does not guarantee future results. But the trading pattern around halvings makes me optimistic that Bitcoin can revisit all-time highs in 2024-2025.
Catalyst 2: Future Fed Rate Cuts
In addition, with the Fed hiking rates aggressively since 2022 to combat inflation, monetary policy will likely shift to easing mode sometime in 2024. As inflation cools back towards the Fed’s 2% target, rate cuts are probable later next year.
The potential pivot to an accommodative Fed injecting liquidity is another catalyst for Bitcoin, in my view. Bitcoin thrives when excess liquidity abounds, as we saw in the post-pandemic recovery. Therefore, expected Fed rate cuts down the road could provide a macro tailwind.
Of course, tighter Fed policy has weighed on risk assets in the near term. However, from a long-term perspective, future rate cuts bode well for Bitcoin’s outlook.
My Take: Yes, Now Is a Good Time to Buy Bitcoin
In summary, despite recent volatility, my take is that buying Bitcoin below $35K looks like a valuable long-term opportunity. Naturally, we could see more downside in the interim, especially if macro headwinds persist. However, trying to time the exact bottom is not a smart idea.
Therefore, dollar cost averaging into a Bitcoin position at these levels will allow investors to capitalize on the discounted prices. With the halving and potential Fed rate cuts on the horizon, the risk-reward of buying BTC here seems skewed positively, in my opinion.
Of course, nothing is guaranteed with an asset class as speculative as crypto. But the long-term use case for Bitcoin as digital gold remains intact, in my view. So, periods of bearish sentiment often prove to be opportune entry points for those with a multi-year investment horizon.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
