What will be the crypto year - 2024? Let's just say right off the bat that we think the bear market and moderate recovery period is behind us, and that 2024 should see the start of another bull market. And while the first half of the year may still send mixed signals, the second half of the year should see the resumption of a true crypto boom (probably on a much larger scale than it was in 2020-2021).
Given the optimistic outlook for next year (we'll talk about the reasons for optimism below), as well as the high correlation between most cryptocurrencies, it's fair to say that the vast majority of coins and tokens will rise next year. And investing in cryptocurrencies can bring higher returns than traditional financial instruments. But let's take a closer look at the situation.
The top crypto asset is BTC Although the new bull cycle will have its own peculiarities, one aspect will remain unchanged: bitcoin will be the engine of growth for the entire market. Both supply and demand factors should contribute to the positive dynamics of the asset.
In particular, Halving will reduce the subsidy for mining a block from 6.25 BTC to 3.125 BTC in April. Given that miners still have to sell coins from time to time to cover their operating costs, coin receipts from them will decrease significantly. In addition, the average cost of mining one BTC is now $33,300 (i.e. approximately equal to its market price). After halving, it will double to $66,600.
Of course, the price of bitcoin will not double immediately after this event, but historical data suggests that within a year, miners should already be back in the plus column.
In terms of demand factors, the situation looks even more encouraging. In particular, the general consensus among traders and investors is that the Fed will inevitably move to lower interest rates next year. By the end of 2024, they should already be around 4.5-4.75 per cent, which will create quite large amounts of low-cost credit for investment, including in bitcoin. If there is a recession in the global economy in 2024, rates will fall even faster.
Rumours are already actively circulating about the SEC's imminent approval of applications for spot bitcoin-ETFs. True, Gary Gensler and the regulator's officials have not yet unequivocally confirmed such predictions. But given the deadlines for reviewing current applications, the most likely scenario is that at least some of them will be approved between January and March 2024. In this case, exchange players will gain access to bitcoin-based instruments, and the relevant funds and trusts will build up BTC reserves.