Since taking a bullish turn at the end of October, Bitcoin and other cryptocurrencies have revisited heights not seen since May 2022. As the end of the year approaches, many investors have declared the end of crypto winter and are looking ahead to continued growth in 2024.
Joining the chorus of optimism, on Wednesday, November 8, Matrixport identified 6 events that could propel crypto markets to new heights next year.
After years of resistance, the expectation that the U.S. Securities and Exchange Commission (SEC) will approve the first spot Bitcoin Exchange Traded Fund (ETF) is increasingly cementing among investors.
Like many market watchers, Matrixport predicts that SEC approval is imminent. Unless it cooks up a new reason to delay making a decision on ETF applications from Blackrock, Fidelity, and others, the SEC has a January deadline to reject or approve their submissions.
As the new year approaches, Blackrock is so confident in the future of US crypto funds that on Thursday, November 9, the asset manager applied to list a second, ETH-holding ETF, causing the cryptocurrency’s price to jump by 10%.
With US-listed spot Bitcoin funds potentially in early 2024, a wave of pent-up institutional demand could send the token’s price soaring.
In one forecast, Galaxy predicted that Bitcoin ETFs could raise $38.6B from institutional investors within three years, eventually swelling to over $400B.
With rumors of an impending float, the USDC-issuer Circle could also contribute to significant crypto market gains in 2024. In its assessment of the prospect, Matrixport said the firm could go public by April.
If the firm does pull off an initial public offering (IPO), the repercussions would likely be felt across the global crypto economy.
Should the event go ahead, the rumored $9B valuation Circle is seeking could entice rival stablecoin issuers to follow suit. It could also attract new investors to the crypto space and further boost prices.
In 2022, the crypto market experienced one of its most damaging black swan events ever courtesy of the FTX crisis.
According to recent reports, Bullish, Figure Technologies and Proof Group have all expressed an interest in acquiring the crypto exchange, which was once one of the most active in the world.
Observing that a winning bid could occur by December, Matrixport projected FTX 2.0 to be operational by May or June 2024.
Moreover, the prediction even suggested that FTX could reclaim its position as a top 3 exchange within twelve months, a comeback that could resolve low liquidity levels that have plagued crypto markets ever since FTX and its sister company Alameda Research disappeared.
Based on historical precedent, most analysts expect the 2024 Bitcoin halving event to positively influence the cryptocurrency’s price.
During three previous halvings in 2012, 2016, and 2020, the price of BTC increased in the month preceding the event. However, in the post-halving period, outcomes have varied.
In 2012, Bitcoin’s price went from about $12 at the time of the halving to over $30 three months later. Within a year, it had soared to over $200!
A similar upswing affected Bitcoin after the third halving in 2020. From a market price of less than $10,000, in the year that followed, BTC’s price climbed into the 5-figure range and has never looked back. After 18 months, it hit an all-time high of nearly $70,000.
Even in 2016, when Bitcoin traded flat for 3 months after the July halving, over a year, it still clocked gains of over 300%, climbing to over $2,500.
Although Ethereum upgrades can be divisive at times, Matrixport identified the implementation of IEP-4844 scheduled for Q1 2024 as a potential catalyst for growth.
Oriented toward the network’s growing range of Layer 2 rollups, IEP-4844 promises to dramatically scale capacity through a concept known as proto-danksharding.
With L2’s increasingly driving innovation among Ethereum developers, more efficient rollups could attract the next killer app that drives mainstream adoption of Web3 platforms.
As Aptos co-founder Avery Ching explained recently, there is currently only one blockchain user for every 250 internet users.
But if the Web3 sector spawns the next Amazon or Google, an influx of new consumers could inject billions of dollars in fresh capital into the blockchain ecosystem, boosting the entire crypto market in turn.
In a recent survey of economists, 94% said they expect the U.S. Federal Reserve to begin cutting interest rates in 2024.
With the high interest rate environment of the past year likely coming to an end, cryptocurrencies like Bitcoin could benefit from lower borrowing costs, which typically lead to more trading activity.
At the same time, with returns on traditional investments expected to decline, digital assets could experience significant inflows as investors flock to more lucrative asset classes.