Bitcoin's (BTC -0.66%) price nearly doubled over the past 12 months as stabilizing interest rates, the approvals of BTC exchange-traded funds (ETFs), and a bullish rotation toward riskier assets lit a fire under the world's top cryptocurrency.

But even after that year-long rally, Bitcoin remains more than 30% below its all-time high. So should investors buy more Bitcoin today before it rallies to new record highs?

A person in a suit holds a glowing Bitcoin sphere in front of a rising chart.

Image source: Getty Images.

What happened to Bitcoin over the past two years?

Bitcoin's price hit its all-time intraday high of $69,044 in Nov. 2021. At the time, low interest rates, stimulus checks, social media buzz, and the growing popularity of commission-free trading platforms like Robinhood all drove smaller retail investors toward cryptocurrencies, hypergrowth stocks, and meme stocks.

But by the end of 2022, Bitcoin was only worth about $16,000. Inflation, soaring interest rates, the failures of high-profile tokens and exchanges, and concerns about tighter government regulations had quickly chilled the market with a new "crypto winter". Many investors also rotated toward more conservative investments like value stocks, CDs, and T-bills.

What will happen to Bitcoin over the next few years?

Yet BTC's price soared over the past year as the market warmed up again. The two main catalysts were hopes for interest rate cuts and the approvals of eleven new Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) this January.

Unlike previous "Bitcoin ETFs", which traded futures contracts, this new batch of ETFs directly held Bitcoin and were directly tethered to its spot price. That more accurate approach made the new Bitcoin ETFs viable alternatives to buying BTC on a cryptocurrency exchange, and it will likely open the door for bigger institutional purchases.

Looking ahead, the next big catalyst for Bitcoin will be the upcoming "halving", which cuts the rewards for mining BTC in half ever four years. The next halving will occur this April -- and it could drive up BTC's price by reducing its available supply.

Bitcoin could also be adopted by more countries and businesses as a mainstream payment method, more companies could mimic MicroStrategy and Block by adding BTC to their own balance sheets, and more investors could consider BTC to be a viable hedge against inflation like gold or silver.

The price targets are all over the map

All of those tailwinds could drive Bitcoin's price higher over the next few years, but analysts' price targets are all over the map. The British multinational bank Standard Chartered (SCBF.Y -0.80%) claims BTC's price will hit $100,000 by the end of 2024, while the venture capital firm CoinFund claims its price will soar as high as $500,000.

The longer-term predictions are even wilder. Fidelity, the financial services giant that recently launched the Fidelity Wise Origin Bitcoin Fund (FBTC 1.85%), claims BTC's price will hit $100 million by 2035 and a whopping $1 billion by 2038. Ark Invest's Cathie Wood, who just launched the Ark 21Shares Bitcoin ETF (ARKB 1.91%), believes BTC's price will hit $1.5 million by 2030 as institutional investors buy more Bitcoin.

Investors should be skeptical of those bullish forecasts, but the SEC's Bitcoin ETF approvals and the upcoming halving might set a floor under its price this year. New tax exemptions on crypto trades in Dubai and Thailand could also drive more countries to embrace cryptocurrency exchanges and finally end the crypto winter.

Should you buy Bitcoin as it rises?

Bitcoin's resilience suggests it might defy the bears and gradually become a mainstream asset. Its price will likely remain volatile along the way, but investors who accumulate BTC as it rises this year could be well rewarded over the next few decades.