The crypto industry has been through a lot of changes in its short existence. If we take a quick look at its history, we can see there have been good years and bad years, coinciding with the cycle of bull and bear markets. Periods of rise are followed by periods of decline and so on and so forth – that much we know for certain. However, we never know how long these episodes are going to last or when they are about to occur.
Owing to their novelty and volatility, the behavior of crypto assets remains a tough nut to crack. It’s always a challenge to figure out whether Bitcoin is going to move upwards or downwards in the near future or if it’s a good time to learn how to purchase eth or not. Although analysts keep a close eye on the market and all the factors that can influence its trajectory so they can come up with accurate predictions, there’s always a certain degree of uncertainty to account for when it comes to crypto forecasts.
However, even if we can’t foresee the future, it’s always good to have a rough idea of what might lie ahead. That being said, the outlook for 2024 looks rather promising for digital assets. After a long and harsh winter, the market seems to be well on its way to recovery and many specialists believe this might be the beginning of a new era of prosperity for crypto.
The Numbers Are Looking Good
Judging by the latest figures, digital currencies are poised for a good run this year. In 2022 we’ve seen crypto prices plummet across the board, with Bitcoin and Ethereum losing about two-thirds of their value and the market recording a total loss of over $2 trillion. Compared to those dark times for the crypto industry, the current values look a lot better.
At the time of writing, Bitcoin was trading at $51,275, after a 32% increase over the past 30 days, while Ethereum was standing at $2,951, up by 33% in the last month. The two leading coins continue to overcome one threshold after another, inching closer to pre-crypto winter values, and many other coins show a similar upward trend.
Many analysts predict that Bitcoin and Ethereum could reach new record highs by the end of the year, especially Bitcoin which has already passed the psychological level of $50K, taking one step closer to its peak price of $68,789 reached in November 2021.
A Historic Decision From The SEC
The second half of 2023 has been dominated by speculations over the potential approval of the first-ever spot Bitcoin exchange-traded funds (ETF) by the U.S. Securities and Exchange Commission (SEC). Not even two weeks into the new year, the SEC announced they gave the green light for the launch of 11 spot Bitcoin ETFs, including from major asset managers like BlackRock, Grayscale and VanEck.
If so far, Bitcoin and crypto by extension were largely regarded as risky speculative assets unsuitable for long-term investment purposes, the SEC’s decision changed the outlook on digital currencies to some extent, bringing them into the spotlight as viable options for retail investors and therefore pushing them closer to mainstream acceptance.
A spot Bitcoin ETF tracks the live price of Bitcoin and can give investors direct exposure to the asset without the need to purchase or store it. It’s the easiest and most convenient way for anyone to own Bitcoin as compared to other methods that involve setting up an account on an exchange platform, creating digital wallets, remembering private keys and so on.
Although the SEC’s Chair Gary Gensler clearly stated that the approval of spot Bitcoin ETFs should not be understood as support for Bitcoin, it can’t be denied that the event represents a major milestone in crypto’s evolution. The launch of the 11 ETFs didn’t have a major impact on Bitcoin’s price as some might have expected, but its effects are far more profound and far-reaching than a price uptick. The simple fact that fund shares tied directly to Bitcoin can now be bought and sold on traditional stock exchanges gives digital assets more legitimacy.
Upcoming Bitcoin Halving
Another aspect that is making industry commentators feel optimistic about crypto’s journey this year is also related to Bitcoin, more precisely the upcoming halving event that is expected to take place in April.
The halving is a condition embedded in Bitcoin’s protocol that requires the reward for mining Bitcoin to be cut in half every 210,000 blocks which usually amounts to a four-year period. This pre-determined measure controls the number of coins that are released into circulation and prevents inflation.
Those who have kept close tabs on crypto’s progress already know there’s a close connection between halving events and Bitcoin price trends. More specifically, the Bitcoin price tends to appreciate around each halving, especially in the months following the event. Since Bitcoin is already on an upward trajectory, the appreciation pattern is likely to repeat this year as well and trigger a new bull run for the flagship crypto with the prospect of fresh record highs on the horizon. If Bitcoin rises, the entire market is expected to follow in its footsteps.
All these events are happening against a backdrop of ongoing institutional adoption of crypto assets and advances in establishing clear crypto regulations, giving more reason for optimism.
Ready For The Next Chapter
So far, 2024 has mostly brought positive developments for the crypto space. Although unpredictability is a chief characteristic of this novel industry and things could change at any moment, the trends and events from the past few months indicate that the rest of the year could unfold on a similar note and bring more good news to the crypto community. This could be interpreted as a sign of market maturation or just the beginning of the long-awaited markup phase in the crypto market cycle.
