Bitcoin (BTC -1.44%) has been a massive winner in 2023. The world's leading digital asset has skyrocketed 163% (as of Dec. 7).

Bitcoin's current market cap is $847 billion. Naturally, investors have their sights set on the coveted $1 trillion mark. Perhaps this will put the top cryptocurrency on the radar of more of the financial and investment community.

Hitting this number translates to an 18% gain from today's value. Not only do I think Bitcoin will hit this mark sometime in 2024, but I think $1 trillion could happen before the end of 2023.

Is there a better environment for Bitcoin?

The current situation could not be any better for Bitcoin. Here's why.

In April 2024, Bitcoin will undergo what's known as a halving. This is an event that happens roughly every four years, and it cuts the rate at which new Bitcoin supply enters the market.

Past halving events have been extremely bullish for this cryptocurrency, both before and after they happen. We are seeing this right now, with strong momentum pushing up Bitcoin's price by 25% in the last month.

The recent price action might also be a direct result of optimism building for a Bitcoin spot exchange-traded fund (ETF) to finally hit the market. BlackRock, Fidelity, Ark Invest, Invesco, and WisdomTree, among others, have all filed applications to introduce this product. The Securities and Exchange Commission could hand out approvals at the start of next year.

There is certainly a lot of anticipation for this. Spot ETFs would essentially legitimize Bitcoin in the financial services industry. Plus, they could open up lots of fresh capital from people who want exposure to Bitcoin with a product that has been approved by regulators and is easy to trade.

We've seen inflation start to come down in recent months. And to the Federal Reserve, this could be viewed as a clear signal that its effort to curb rising prices across the economy by aggressively hiking interest rates is working. This could prompt the central bank to cut rates sometime in 2024. This would be another bullish catalyst for a risky asset like Bitcoin.

This is a great environment for Bitcoin to shine.

Think about the long term

It's easy to get caught up in what's happening right now and what the next several months will hold. But to be clear, no one should buy Bitcoin unless they plan to hold it for the next five or 10 years. This is a long-term investment and should be treated as such.

Besides the catalysts I mentioned above, why else would anyone want to own Bitcoin? I believe it comes down to one critical reason.

A conversation about Bitcoin centers on the fact that it has absolute scarcity. There can be only 21 million coins. This is based on a fixed supply cap that is set in Bitcoin's software. This number could change, but only if the majority of nodes accept it. Many experts believe this is extremely unlikely.

So we have an asset with a fixed supply that is going up against a world in which fiat, or government-backed, currencies are constantly increasing in number. Bitcoin can be viewed as an attractive store of value.

Although, like a growth tech stock, it's volatile, which might be hard for some folks to handle. Bitcoin has done a magnificent job at increasing its holders' purchasing power over the years.

I view a $1 trillion market cap as extremely likely. But looking out even further, Bitcoin's value could be much higher than that.