Bitcoin is flying high again, but is now a good time to buy?

Bitcoin is trading above $US60,000 for the first time since 2021.

It's been a busy few months for Bitcoin. The launch of spot Bitcoin exchange-traded funds, dramatic price movements and more mainstream news coverage mean the leading cryptocurrency is firmly back in the spotlight.

But as Bitcoin approaches it's highest-ever price (having already hit a new all-time high in Australian dollars), what's coming next, and is now a good time to get involved?

Is now a good time to buy Bitcoin?

Bitcoin has made an impressive start to 2024. After the approval of 11 spot Bitcoin exchange-traded funds in January, the price of Bitcoin is now up more than 40% in AUD since the start of the year.

The Bitcoin ETFs have seen more than US$7 billion of net inflows in less than 2 months and demand is still growing. There are reports Morgan Stanley is considering offering spot Bitcoin ETFs to its customers.

2024 will also see the next Bitcoin halving - where the Bitcoin rewards given to "miners" are cut in half.

This occurs roughly every 4 years and has an immediate impact on the supply of new Bitcoin entering the market. The next halving will take place sometime in April.

All of this potentially points to a promising rest of the year for Bitcoin and the wider cryptocurrency market.

However, the simple fact of the matter is Bitcoin remains an extremely volatile asset. It's prone to dramatic rises and drops in price and this is something you need to factor in before deciding to buy.

What price could Bitcoin get to?

Given its volatility, predicting the price movements of Bitcoin in either direction is no simple task, but there are a number of positive catalysts on the horizon.

"As we stand on the cusp of a new Bitcoin bull market, several key factors suggest a significant price growth for Bitcoin during this cycle," said CoinJar CMO Dominic Gluchowski.

"Firstly, the movement towards Bitcoin allocation in "all-in-one" asset funds, akin to trends seen in Canadian Fidelity, one of the largest Canadian asset management firms, is poised to inject new capital into the market.

Some of the largest investment management firms in the US with trillions of dollars under management are expected to recommend a 1-3% Bitcoin allocation to their customers.

Coupled with the upcoming Bitcoin halving in April, a historical precursor to marked price appreciation, we're looking at a potent mix for growth.

Post-halving, the narrative is anticipated to pivot towards the urgency of securing Bitcoin ETFs before the broader market catches on, especially in the context of the US government's monetary expansion to buoy the stock market ahead of elections.

Given these dynamics, our projection sees Bitcoin more than doubling its current value, potentially reaching the AUD$200,000 mark.

While pinpointing an exact price remains challenging, the timing of market movements—peaking between 8 to 18 months from today with a significant "blow off top" provides a more straightforward investment trajectory.

This cycle's unique confluence of ETF integration, halving dynamics, and macroeconomic factors, combined with a surge in retail interest, sets the stage for unprecedented price levels, reflecting a broader acceptance and integration of Bitcoin into diversified investment portfolios."