Widely recognized as the original cryptocurrency, Bitcoin (BTC-USD) maintains the largest market capitalization among all digital assets, and is the benchmark in the crypto space. As the primary trading pair for altcoins, its movements influence the broader market. While the impact of a Bitcoin spot ETF may be restrained, its long-term potential lies in potential institutional adoption, which could eventually elevate its value. This is a key part of this Bitcoin analysis article.

The highly-anticipated Bitcoin halving event in April is typically associated with pre-event and post-event surges, which investors and analysts should consider as a key factor right now. With a fixed supply of 21 million coins that will eventually be minted, Bitcoin is set to fight off inflationary forces and reinforce its continued demand as usage on its network surges in 2024 and beyond.

Let’s dive into why Bitcoin is likely to remain the king of crypto, at least for the foreseeable future.

Anticipation for Rate Cuts in March Squashed

Bitcoin declined Wednesday following the Federal Reserve’s decision to maintain interest rates, dashing hopes for a rate cut in March. Analyst Tony Sycamore warned of challenges for U.S. stocks and Bitcoin amid the Fed’s hawkish stance. Unless earnings impress from the so-called “Magnificent Seven,” Sycamore warned that a potential US equity dip could impact Bitcoin and other risk assets. Following the FOMC meeting, Bitcoin dipped 2.2% to just above $42,000 per token.

The Federal Reserve maintained a hawkish stance despite easing inflation, signaling no certainty for rate cuts. Rate cuts, seen as bullish for risk assets, stimulate spending and risk-on behavior. For cryptocurrencies like Bitcoin, this is a big factor bulls rely on when attempting to predict rallies.

Bitcoin is anticipated to face continued downward pressure due to deteriorating risk sentiment caused by the Fed’s hawkish stance, according to Sycamore. He predicts a rally to $45,000 before retracing to the mid-$30,000 range, eventually returning to an upward trend.

Bitcoin May Drop

Bitcoin is still positioned to solidify its title as digital gold in 2024 despite short-term setbacks. It demonstrated strong resilience during its bank crisis in March 2023, which outperformed other traditional assets.

While institutional adoption hasn’t sparked significant market movements, the SEC’s cautious approval has yet to endorse cryptocurrency fully.

Although BlackRock’s ETF amassed $2 billion following its approval, unprecedented support for Bitcoin and global economic pressures, including US inflation, may trigger a pullback. Tensions in the Middle East and the end of the Bank Term Funding Program (BTFP) on March 11 could contribute to market instability.

Amidst a mounting global sovereign debt of $91 trillion affecting fiat currencies, Bitcoin’s transparent, finite, and decentralized nature positions it as a long-term concept value. While potential economic pressures may cause initial wobbling, Bitcoin could emerge as a global economic North Star, offering stability amid various elections worldwide.

Policymakers, facing limited economic flexibility, will deploy measures to avert crises, especially in the banking sector. New U.S. packages will support banks and address the real estate market. Bitcoin is expected to rebound, surpassing $50,000 in Q2 amid revived sentiment and increased risk appetite.

$170,000 Before BTC Halving?

Anthony Scaramucci, Skybridge Capital’s founder, anticipates Bitcoin surging to $170,000 post-April’s halving event, following historical patterns of previous halving cycles.

Scaramucci, discussing Bitcoin halving cycles, foresees a conservative estimate of $200,000 if Bitcoin is at $50,000 in April. In the long term, he envisions Bitcoin reaching $400,000, half the market cap of gold.

As the initial external investor in BlackRock’s bitcoin ETF, he also commends CEO Larry Fink’s reversal on Bitcoin skepticism, acknowledging Fink’s evolved perspective and recognition of BlackRock’s role in the crypto space.

Now May Be a Good Time to Be Bullish on Bitcoin

The rise of Bitcoin ETFs could drive more institutional capital into this asset, and the sector as a whole. Additionally, Bitcoin’s upcoming halving event will certainly be something investors of all stripes pay close attention to.

I have no idea whether the pundits will be right concerning where Bitcoin will trade this year. However, over the longer term, it has been true that Bitcoin has historically moved higher. For those looking for any sort of hedge against the dollar and other financial system risks, this is a token to consider. All in all, Bitcoin is perhaps the token I remain most bullish on right now.

On the date of publication, Chris MacDonald did not have (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.