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We’ve been on this bear market for a very long time. It’s just like enduring an extended winter, the place one should all the time be ready with a hat and gloves. You end up questioning, “When is the solar popping out?” Nevertheless, my sentiment has shifted. It isn’t merely the anticipation of summer season or the approaching bull market. As a substitute, I’m already sporting a T-shirt and taking off my jacket. I believe there are clear indicators that the bull market is already right here.
2023 has been an thrilling yr for the business. The mixed crypto market capitalization surged almost 93% from Jan 1, 2023’s $794 billion to $1.53 trillion as of Dec 5. As we’re very near the tip of 2023, it’s time to look ahead and switch our focus to the subsequent yr. On this article, I’ve collected crucial crypto occasions to look ahead to for 2024.
In 2024, I consider there will likely be six completely different market catalysts that would function an important space of curiosity for market individuals. They may additionally create new funding alternatives.
Spot Bitcoin ETF approval within the US
In Oct 2021, the US Securities and Alternate Fee (SEC) granted approval for the nation’s first BTC-based exchange-traded fund. The monetary watchdog has but to approve a spot ETF for Bitcoin in the USA, however I count on this to vary quickly.
On Nov 30, SEC officers met with the representatives of Grayscale, a outstanding crypto asset supervisor seeking to convert its existing Grayscale Bitcoin Belief into an exchange-traded fund. The corporate received a critical court battle in opposition to the company in August, legally forcing the latter to evaluate its BTC ETF utility.
A day earlier, there was additionally a proper assembly between the monetary watchdog, BlackRock, and Nasdaq. The asset supervisor filed for a spot Bitcoin ETF on the SEC in June and a spot Ethereum ETF in November. Moreover the above developments, Bloomberg Intelligence ETF analyst James Seyffart mentioned he believes that the likelihood of SEC Bitcoin ETF approval early subsequent yr is round 90%. Analysts consider the approval will occur someplace between January 8 and 10.
The market is at the moment optimistic, and a Bitcoin spot ETF within the US will play a necessary function in onboarding establishments in search of to attain diversified asset allocation through BTC investments.
Ethereum Dencun
Main upgrades to Ethereum’s community are sometimes among the many yr’s most essential occasions. This would be the case in 2024, when the Dencun upgrade is expected to take place within the first quarter of 2024, introducing the long-awaited proto-danksharding.
Proto-danksharding is the prototype of an iteration of danksharding expertise that has been developed by Ethereum. As a consequence of Ethereum’s restricted scalability, transactions grew to become gradual and costly during times of heavy utilization. Builders plan to make the most of sharding, the place the community is partitioned into smaller items known as shards that may independently execute sensible contracts and course of transactions.
After the Dencun improve, rollup-based layer-2 chains like Arbitrum One, Optimism, and Base can add cheaper information to blocks on the Ethereum mainnet through blobs, which could be despatched and hooked up to blocks with the info inside being inaccessible for the Ethereum Digital Machine. With blobs and blob-carrying transactions, layer-2 chains can retailer and retrieve off-chain information on the Ethereum mainnet in a cost-efficient method, making layer-2 transactions considerably cheaper after the Dencun improve.
Dencun can even present different advantages for Ethereum customers, together with optimized block area, lowered information storage prices, improved cross-chain communication, and enhanced safety through the depreciation of the SELF-DESTRUCT function.
The tip of the US rate of interest hike
Since early 2022, the federal funds charge has constantly elevated till Q3 2023, because the Federal Reserve has tried to fight inflation in the USA. Between January 2022 and August 2023, the efficient charge increased from 0.08% to the present goal rate of 5.25% and 5.5%.
With US inflation falling from a excessive of 9.1% in June 2022 to as little as 3.2% in October 2023, I consider the Fed’s rate of interest climbing cycle is reaching its finish. The market anticipates the primary charge cut to happen as early as Could 2024. Below this impetus, constructive sentiments within the cryptocurrency business are anticipated to strengthen, enhancing the attraction of Bitcoin and different digital belongings.
Why does this matter to us? If we consider the varied monetary markets as a sequence of swimming pools at completely different ranges, on the highest degree, we discover the US financial and bond market, which could be in comparison with the biggest pool.
At the moment, rates of interest are excessive, leading to a considerable quantity of “water” on this pool. Nevertheless, as soon as rates of interest are lowered, it’s as if the water begins to move towards smaller swimming pools, similar to fairness and crypto. When rates of interest lower, the bond market turns into much less engaging, and people are extra inclined to speculate their cash in belongings that provide greater dangers and returns, similar to crypto.
Circle IPO
Circle, the issuer of the USD Coin (USDC) stablecoin, is preparing to go public early next year through an preliminary public providing (IPO), in keeping with a November 2023 report. As it can make the agency the primary publicly traded firm amongst issuers, the transfer is predicted to assist the adoption of cryptographic stablecoins.
Nevertheless, this isn’t Circle’s first try to go public. A yr in the past, the stablecoin issuer terminated its agreement with special-purpose acquisition firm (SPAC) Harmony Acquisition Corp. The rationale for the termination was reportedly as a result of SEC’s lack of approval of the deal, first introduced in July 2021.
Bitcoin halving
Similar to main Ethereum upgrades, Bitcoin halving is among the many crypto business’s most significant developments for 2024. Nevertheless, not like ETH onerous forks, these occasions happen roughly each 4 years.
The occasion will scale back the quantity of latest Bitcoin that miners can obtain for every newly mined block by 50%. By chopping the brand new coin provide in half, Bitcoin will grow to be extra scarce and fewer inflationary.
With enhanced supply-demand dynamics, I count on BTC’s worth to surge after the occasion. In actual fact, all earlier halvings have been adopted by main crypto bull runs.
FTX case nearing decision
FTX’s founder, Sam Bankman-Fried, was found guilty of multi-billion greenback fraud in November. The approval to liquidate almost $880 million of belongings to repay collectors has been obtained as a part of the decision course of. These developments point out that FTX is steadily coming into a stage the place the trade will endure restructuring. The decision of this matter is predicted to revive some belief and regulatory readability for buyers, probably attracting new retail funds to the business. SEC Chair Gary Gensler indicated his willingness to think about FTX’s reboot below the situation {that a} new management takes SBF’s place and that the trade is operated inside authorized boundaries. If accredited by the regulator, such a restart may assist enhance belief in FTX or, on the very least, mitigate the adverse influence of the scandal.
The street to the subsequent crypto bull market
With the US approving BTC spot ETF, the Dencun improve, and different important catalysts, we may very possible witness a Bitcoin Tremendous Cycle in 2024. Nevertheless, there are potential adverse components that would happen subsequent yr.
For example, the now-defunct Mt.Gox trade is expected to repay 137,000 BTC to creditors, and the US authorities plans to liquidate the Bitcoin stash seized within the Silk Road case. These occasions may introduce promoting stress and probably result in declining cryptocurrency costs. Moreover, the worldwide regulatory panorama for cryptocurrencies stays unsure, which opens the door to unexpected occasions.
Then again, I consider that the liquidation of BTC from the Mt.Gox case and the US authorities’s Silk Highway seizure may mark the emergence of an precise bull market. This might be accompanied by the widespread adoption of cryptocurrencies and the introduction of improvements. Regardless of the future holds, you will need to “Do Your Personal Analysis” (DYOR) and be ready for what may probably be probably the most bullish market in crypto historical past.
