Bitcoin briefly traded over $42,000 earlier today for the first time since April 2022. The world’s largest cryptocurrency is now trading at prices last seen in the weeks before the collapse of the Terra stablecoin in May last year, which wiped $50 billion off crypto market prices. This substantial strengthening is fuelling hopes that crypto markets could finally be emerging from the bear market which has settled since the failure of Three Arrows and FTX – and that a crypto bull run may be beginning.
Analysts believe that the prospect of interest rates being cut in the US could be partly responsible for these stronger prices. Markets now believe there is more than a 50% chance that the Federal Open Market Committee will cut rates by 0.25% at their next meeting in March – and have already fully priced in a cut in May. Lower rates tend to increase the value of Bitcoin by feeding into greater risk appetite and making it easier and cheaper for investors to access cheap capital for investment purposes.
There is also optimism surrounding BlackRock’s Bitcoin ETF, which is expected to secure regulatory approval imminently. A spot Bitcoin ETF would allow institutional investors to access crypto via the stock market and therefore likely lead to new waves of capital into decentralised finance markets.
Now that the legal cases against FTX’s Sam Bankman-Fried and Binance’s Changpeng Zhao have been concluded – with both being found guilty of criminal offences – crypto analysts also believe that uncertainty has now been removed from crypto markets. With these legal issues settled, there could now be scope for Bitcoin to start making sustained gains.
Many analysts are now making bold predictions about where the Bitcoin price could be headed in 2024 – with some even believing that next year could see Bitcoin reach all-time highs of $100,000 or more. However, Rume Ophi, a crypto market analyst based in Lagos, is more cautious. He told Disruption Banking that “Bitcoin reaching a 19-month peak is interesting, but I don’t think the bull run has started yet – this could be another short-term rally.”
He also suggested that, as speculation over a Bitcoin ETF continues to rise, “this is clearly a case of buy the rumour, sell the news.” This means Bitcoin prices could in fact go down upon the formal announcement of the EFT, as traders who predicted this would happen cash out their profits.
Despite caution over short-term volatility, Ophi is confident that the longer-term signs are promising for Bitcoin. “The price will hopefully start to move up soon – the macros are in its favour as US Fed Chair Jay Powell is looking likely to start relieving rate hikes.”
“But let’s see what happens before January 10th, the deadline for the ETF.”
Author: Harry Clynch
#Bitcoin #Crypto #ETF #FTX #Binance #DigitalAssets
One Response
Bitcoin ETF is just the beginning! This will be followed by Ethereum ETF + other projects joining in = these developments will have an immense global effect on the total crypto market cap and the overall adoption rates once the Wall Street has opened the doors! We had seen a temporary drop of $BTC recently that followed the ETF news. This was a deliberate manipulation of the market by whales. This was a whale BTC market move when the whales sold below $50K BTC and bought again the BTC below $40K taking in the profits and recovering portfolios. They could not push the BTC bottom further below, because strong buy demand was there and Wall Street has joined the game.
If no major economic crisis happens (all else equal) in 2024 (USDT Tether liquidity issues or possible bankruptcy – low probability at the moment) we should see a mega bull run starting late 2024/early 2025 lasting to late 2025/early 2026. This assumes that interest rate hikes will stop and we will see the rates to start decreasing throughout 2025. There is also high probability that there will be additional increase (money printing) in US Dollar volume / money supply at the end of 2024 that will provide an additional firepower effect the next bull run in combination with low interest rates and cheap borrowing. This will be the mega bull ran with potentially push the total crypto market cap over $7-$10 trillion threshold and even surpassing gold at $12 trillion market cap. The 2025 bull run will be the mega bull run of our times!