Crypto Market Rises Again: Echoes of 2020 Bull Run Amid Anticipated Influential Factors for 2024
Summary:
As 2024 begins, the cryptocurrency market is witnessing a resurgence that mirrors the bull run of December 2020. The market cap of digital currencies has grown nearly 100%, from $831 billion to over $1.8 trillion since 2023. Analysts see parallels between previous bull markets and the current situation, citing similar driving factors including the launch of Bitcoin ETFs, upcoming halving events, regulatory changes and shifting sentiments. However, whether the market will maintain the upward trajectory remains uncertain as various financial and geopolitical factors come into play. Approval of a U.S. spot BTC ETF, potential Federal Reserve rate cuts in 2024, and the next Bitcoin halving event are some significant events anticipated to impact the crypto market.
As we ushered out 2023 and welcomed the year 2024, the cryptocurrency market has once again shown signs of resurgence, mirroring the bull market of December 2020. With the revival has come a renewed sense of hope and promise, as investors anticipate substantial progress. Since 2023 commenced, the market cap of digital currencies has experienced massive growth, leaping from $831 billion to over $1.8 trillion - approximately a 100% increase.
This recent upswing has understandably led to parallels being drawn between the previous bull market during the holiday season and the present state of affairs. Antoni Trenchev, Nexo's co-founder and managing partner, sees the current market movements as a reflection of the late 2020 to early 2021 holiday period. These circumstances preceded past notable bull markets and major advancements into wider crypto acceptance.
He noted that the bull run witnessed during this festive season of 2023-2024 could be an old omen signaling an incredible new chapter, particularly in light of the earliness of the 'Santa Rally' and the impending Bitcoin halving earmarked for April 2024.
HashKey Capital partner, Jupiter Zheng, conceded that while holiday influences undoubtedly played a part in the current market growth, there were other additional driving factors. These include the future launch of spot BTC exchange-traded funds (ETFs), the 2024 halving event, the expansion of the Bitcoin ecosystem and the Federal Reserve's shift in perspective.
Ryan Lee, senior analyst at Bitget Research, emphasized that macro conditions including regulatory updates, technological advancements, and investor sentiment shifts were major influences on the current market dynamics. He pointed out that financial indicators like the dip in the U.S. 10-year Treasury yield and the decline in the U.S. Dollar Index have created a more conducive environment for Bitcoin's use.
Despite these promising signs, there's still uncertainty whether the market would be able to surpass the $1.7 trillion threshold without setbacks. While some industry experts do not anticipate immediate skyrocketing prices, others believe that considerable institutional interest will continue to shape upcoming market trends, mainly in Europe and the Middle East.
Even though historical data indicates that such upswings may not be durable, various factors like policy amendments, inflation rate adjustments, and geopolitical occurrences could play a pivotal role in driving Bitcoin's price.
At the beginning of 2024, anticipation is rife over a United States spot BTC ETF's approval. If approved, it could trigger a significant rush of funding into the crypto market, much like what happened post the approval of the first gold ETFs in 2004. Other factors affecting market dynamics include the possible cut in the Federal Reserve rate in 2024 and the upcoming Bitcoin halving in May 2024.
Additionally, China's efforts to globalize the renminbi, along with the growing consideration of digital financial transactions within the G20 have further positioned cryptocurrencies as significant players in the global financial landscape.
Published At
1/5/2024 5:01:00 PM
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