4 Bitcoin Catalysts That Will Shape the Crypto Market in 2024

4 Bitcoin Catalysts That Will Shape the Crypto Market in 2024

Bitcoin, the world’s leading cryptocurrency, has been on a remarkable rally since late 2023, reaching new highs and attracting widespread attention.

But what are the main factors driving its price and performance in 2024?

In this article, intergovernmental blockchain expert Anndy Lian will explore four potential catalysts that could have a significant impact on Bitcoin’s future — the impact of spot BTC exchange-traded funds (ETFs), the upcoming Bitcoin halving, the June quarterly expiry of Bitcoin options and futures, and the U.S. presidential election.

Spot Bitcoin ETFs: A Game Changer for the Industry?

One of the most anticipated events in the crypto space was the launch of spot Bitcoin ETFs in the US, which began trading in January 2024. These are financial products that track the price of Bitcoin and allow investors to buy and sell shares through their existing brokerage accounts without having to deal with the complexities and risks of directly holding or storing the cryptocurrency.

The approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) is seen as a major regulatory breakthrough and a validation of Bitcoin as a legitimate asset class. It is also expected to attract more institutional and retail investors into the crypto market, increasing the demand and liquidity for Bitcoin. As of the middle of March 2024, nine Bitcoin ETFs hold nearly half a million BTC.

Not everyone is optimistic about the impact of spot Bitcoin ETFs on the crypto industry. Some critics argue that these products could introduce more volatility and manipulation into the market, as well as undermine the decentralized and peer-to-peer nature of Bitcoin. Moreover, some investors may prefer to hold Bitcoin directly rather than through a third-party intermediary to enjoy the full benefits of its security, privacy, and resistance to censorship.

Bitcoin Halving: A Supply Shock or a Non-Event?

Another key event that could affect Bitcoin’s price and performance in 2024 is the Bitcoin halving, which is expected to occur next month. This is a pre-programmed adjustment to the Bitcoin protocol that reduces the amount of new Bitcoins generated per block by 50%, from 6.25 to 3.125 Bitcoins. This means that the annual inflation rate of Bitcoin will drop from about 1.8% to 0.9%, making it scarcer and more valuable.

Historically, each halving event has coincided with the beginning of a bull market for Bitcoin, as the supply reduction creates a supply-demand imbalance that drives the price up. For instance, the first halving in 2012 was followed by a 9,000% increase in Bitcoin’s price over the next year, while the second halving in 2016 was followed by a 2,800% increase over the next 18 months. The third halving in 2020 was followed by a 400% increase over the next 12 months.

Some analysts caution that the halving effect may not be as strong or predictable as in the past, as the market has become more mature and efficient, and the halving is already priced in by the rational expectations of investors. Moreover, the halving may not have a direct causal relationship with the price movements, as other factors, such as macroeconomic developments, regulatory changes, and technological innovations, may also play a role. Therefore, the halving may not necessarily trigger a new bull run but rather confirm an existing trend.

June Quarterly Expiry: A Volatility Spike or a Smooth Transition?

Another factor that could influence Bitcoin’s price and performance in 2024 is the June quarterly expiry of Bitcoin options and futures, which is scheduled for June 21, 2024. This is the date when a large number of contracts that give investors the right or obligation to buy or sell Bitcoin at a predetermined price and date expire and settle.

The expiry of these contracts could have a significant impact on the market, as investors may adjust their positions or exercise their options before or on the expiry date, creating large buy or sell orders that could move the price. Moreover, the expiry could also affect the implied volatility of Bitcoin, which is a measure of how much the market expects the price to fluctuate in the future. A high implied volatility means that the market anticipates large price movements, while a low implied volatility means that the market expects stable price movements.

Some analysts expect that the June quarterly expiry could cause a spike in volatility, as the market may experience increased uncertainty and speculation ahead of the event. This could create opportunities for traders to profit from the price swings but also pose risks for investors who are not prepared for the potential price shocks.

On the other hand, some analysts believe that the June quarterly expiry could be a smooth transition, as the market may have already priced in the event and adjusted its positions accordingly. This could result in a calm and orderly market with minimal impact on the price and volatility.

US Presidential Election: A Bullish or a Bearish Scenario?

The final event that could have a significant impact on Bitcoin’s price and performance in 2024 is the U.S. presidential election, which will take place on November 5, 2024. The election will determine the next president and vice president of the United States, as well as the composition of the Congress and the state governments. The outcome of the election could have major implications for the U.S. and global economy, the geopolitical landscape, and the regulatory environment for the crypto industry.

The main contenders for the presidency are the incumbent Democrat Joe Biden, who is running for re-election, and the former Republican Donald Trump, who is running for a second, non-consecutive term. Both candidates have different views and policies on various issues, such as taxation, trade, health care, immigration, foreign affairs, and climate change, that could affect economic growth, inflation, interest rates, and market sentiment in the U.S. and abroad.

The election could also have a direct impact on the crypto industry, as both candidates have different stances and approaches to the regulation and innovation of the crypto space. Biden has been generally supportive of the crypto industry, in my opinion, as he has expressed interest in exploring the potential of a central bank digital currency (CBDC) and fostering the development of blockchain technology.

Trump, on the other hand, has been generally hostile to the crypto industry, as he has repeatedly criticized Bitcoin and other cryptocurrencies, calling them a “scam” and a “threat” to the U.S. dollar. He has also imposed sanctions and restrictions on several countries and entities that are involved in the crypto space.

He has also expressed skepticism and opposition to the idea of a CBDC and the innovation of blockchain. However, things may be turning for Trump, who is now appearing to be warming towards Bitcoin in a recent article, saying that some regulation was likely required, but many people are embracing it, and he could “live with it one way or the other.”

The Bottom Line

Bitcoin, the world’s leading cryptocurrency, has a lot of potential catalysts that could affect its price and performance in 2024. These include spot Bitcoin ETFs, the upcoming Bitcoin halving, the June quarterly expiry of Bitcoin options and futures, and the U.S. presidential election. Each of these events could have positive or negative implications for the crypto industry, depending on how they unfold and how the market reacts.

Therefore, investors and traders should be aware of these events and their possible outcomes and be prepared for the opportunities and challenges that they may bring.

Nevertheless, Bitcoin has reached a new all-time high of over $73,000. I am still very positive about its outcome for this year.

Let’s see.

 

Source: https://www.techopedia.com/4-bitcoin-catalysts-that-will-shape-the-crypto-market-in-2024

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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How to Prepare for Bitcoin Halving in April 2024: Expert Tips & Projections

How to Prepare for Bitcoin Halving in April 2024: Expert Tips & Projections

Bitcoin halving is the most anticipated event of the crypto industry that occurs once every four years. According to the Bitcoin halving countdown, April 18, 2024, is the date when Bitcoin is expected to mint its 840,000 block and subsequently undergo its fourth halving.

From an investor’s perspective, halvings are seen as milestone events that have ushered crypto bull markets. For miners, halvings bring challenging business conditions where miner revenues are cut by half and production costs per Bitcoin theoretically double.

In this article, we conduct an in-depth Bitcoin halving analysis, as well as provide potential post-halving price scenarios and tips for both investors and miners from industry experts on how to prepare for the fourth Bitcoin halving cycle.

Key Takeaways

  • Bitcoin is expected to undergo its fourth halving on April 18, 2024.
  • Historical charts showed Bitcoin prices took between 12 to 18 months to peak post-halving.
  • The introduction of spot BTC ETFs has created unprecedented market conditions.
  • Graeme Moore, the head of tokenization at Polymesh Association, predicted that the price of BTC could go as high as $100,000 past halving in 2024.
  • Anndy Lian, an intergovernmental blockchain expert, predicted that the BTC price post-halving has the potential to surge 10% higher than its all-time high, which currently surpasses $73,000.
  • With more funds flowing into BTC ETFs, Lian added, the BTC price could go up an additional 30% by the end of the next quarter.
  • Yuya Hasegawa, an analyst at the crypto exchange Bitbank, expected a strong rally during the latter half of this year.

How to Prepare for the Next Bitcoin Halving

Tips for Investors

The crypto market is unpredictable, but that shouldn’t keep investors from learning about historical patterns and possible outcomes to stay ahead of the curve.

Here is how investors can prepare for the Bitcoin halving event.

1. No Near-Term BTC Price Increase Guaranteed

Financial markets are forward-looking. Trades are made based on the potential of future returns. Therefore, it may come as no surprise that investors have been accumulating Bitcoin since the fourth quarter of 2023 in preparation for Bitcoin’s fourth halving, having seen BTC prices surge in past halving cycles.

As of March 13, 2024, Bitcoin prices have gained over 70% year-to-date and hit new all-time highs of over $73,000 without seeing a significant correction in the first three months of 2024.

Given the predictable and anticipated nature of halving events, you should keep in mind that rational investors are most likely to buy Bitcoins ahead of the event.

Therefore, the Bitcoin halving event does not guarantee an immediate uptick in Bitcoin prices. We could even see a sell-the-news event as euphoria around Bitcoin halving fades away.

2. Positive Long-Term Impact of Halving

Over the mid-to-long term, halving is expected to have a positive impact on the price of Bitcoin due to the reduction of BTC supply. Supporting this theory is the historical market data that showed that Bitcoin prices surged astronomically over the next 18-month period following past halving cycles.

  • According to Fidelity Asset Management, Bitcoin prices surged as much as 10,485% within 371 days after the first Bitcoin halving.
  • Following the second halving in July 2016, Bitcoin prices rose as much as 3,103% over the next 525 days.
  • Similarly, after the third halving period in May 2020, Bitcoin prices jumped as much as 707% within the next 546 days.

3. Impact of Spot BTC ETFs

The introduction of spot BTC ETFs has created unprecedented market conditions that halving cycles of the past did not encounter.

Since the spot BTC ETFs were approved on January 11, 2024, the popularity of the instrument has created a Bitcoin demand shock.

For reference, the average BTC daily demand on ETF trading days currently stands at 4500 Bitcoins surpassing an average of 921 new Bitcoins minted per day, Coinshares reported.

If the spot BTC ETF remains consistent when the supply of Bitcoins reduces by 50% post-halving, the supply-demand principles of economics tell us that Bitcoin prices might rise.

Tips for Miners

One of the biggest challenges that the BTC halving event poses for miners is the reduction in mining rewards.

Apart from the 50% cut, the halving might also increase competition, heightening mining difficulty and potentially increasing the price of transaction fees.

Yuya Hasegawa, an analyst at the crypto exchange Bitbank, told Techopedia in a note that miners often have to consider how they will manage to operate with 50% less revenue.

“This has affected Bitcoin’s hash rate and the network’s difficulty post-halving, as some of them halt operation until the difficulty drops low enough for them to make a profit again. Some others sell their Bitcoin holdings to make up for decreased cash flow.”

However, Hasegawa added that miners should also consider the release of spot BTC ETFs, which could make the situation a little different.

This is because spot BTC ETFs are buying more than they can produce almost every day, thus overwhelming the BTC supply.

“If the ETF inflow continues to overwhelm Bitcoin’s supply, which it probably will since it already is buying more than the network can produce in a day even before halving, the price may continue to rise post-halving, and that could maintain mining profitability.”

Moreover, miners should also prioritize energy efficiency as the cost of electricity is a major component of mining expenses, Anndy Lian, an intergovernmental blockchain expert and the author of NFT: From Zero to Hero, explained.

This can be done through the use of efficient hardware and access to low-cost energy sources, which can help maintain profitability post-halving.

Lian told Techopedia:

“In the past, most miners looked at standard operation costs. I hope they will do more research and stay informed about market behaviors and trends to make educated decisions regarding their operations. They should evaluate their financial health, including debt levels and capital reserves, to withstand potential revenue drops due to the halving. This would also give them a gauge on how fast they expand.”

Bitcoin Price Scenarios to Consider With Approaching BTC Halving Event

Post-Halving Bitcoin Price Action: Analyst Views

Historically, BTC halving events led to the cryptocurrency’s price increases due to the reduced supply of new Bitcoin tokens entering the market.

Lian predicted that the BTC price post-halving has the potential to surge 10% higher than its all-time high, which currently surpasses $73,000.

However, he added that post-halving and with more funds flowing into BTC ETFs, the BTC price could go up an additional 30% by the end of the next quarter.

“It’s also worth noting that predictions vary widely, and the actual outcome will depend on a multitude of factors, including market demand, investor sentiment, and broader economic conditions. Always remember that investing in cryptocurrencies carries risk, and prices can be highly volatile. It’s advisable to conduct thorough research and consider seeking advice from financial experts before making investment decisions,” Lian added.

The launch of spot BTC ETFs earlier this year was a huge success, and their demand could grow even bigger later in the year, according to Hasegawa.

He added that while the Federal Reserve is still waiting for inflation to calm down, there is a possibility they could start cutting rates, which could increase demand for both BTC and ETFs and facilitate more cash flow.

Bitbank’s Hasegawa concluded:

“Furthermore, halving will crunch Bitcoin’s supply, so we could expect that those three elements (rate cuts, ETFs, halving) will together create a strong rally sometime during the latter half of this year.”

Graeme Moore, the head of tokenization at Polymesh Association, predicted that the price of BTC could go as high as $100,000 past-halving in 2024 as the cryptocurrency is already experiencing massive heights.

“We are already seeing the effect of the upcoming halving with a 50% increase in price since February. Bitcoin is now over $72K. In addition, the relentless bid from the new Bitcoin ETFs is proving that the broader market is beginning to see the value in a global, decentralized, provably scarce asset. If the previous cycles are an indicator, the price of Bitcoin will continue to rally into the halving and after.”

Historical Bitcoin Halving Analysis

A study of historical Bitcoin halving charts showed that BTC consistently saw price increases in the weeks ahead of halving events. Following halving events, Bitcoin showed a tendency to trade within a range in the next months.

Following the second Bitcoin halving, BTC price traded range bound between $600 and $800 from July 2016 to November 2016.

Similarly, following the third Bitcoin halving cycle in May 2020, BTC traded in the $8,000-$14,000 range for the next six months before finally breaking out to scale new all-time highs.

Historical charts also showed that Bitcoin prices took between 12 months to 18 months to hit the peak price during the first three halving cycles.

Market catalysts that supported Bitcoin prices during each cycle included the European debt crisis of 2009-2012, the initial coin offering (ICO) boom of 2016, and ultra-low interest rates of the post-pandemic era.

The Bottom Line

The upcoming BTC halving is poised to impact both investors and miners. While historical data suggests a potential for long-term price increases, short-term volatility and uncertainty remain prevalent.

Investors should exercise caution, considering the unpredictability of market reactions post-halving, and conduct thorough research before making investment decisions.

Miners facing reduced rewards and heightened competition must prioritize efficiency and strategic planning to navigate the challenges ahead.

As the crypto landscape evolves with the introduction of spot BTC ETFs, staying informed and adaptable will be crucial for all stakeholders in the Bitcoin ecosystem.

Source: https://www.techopedia.com/how-to-prepare-for-bitcoin-halving

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Bitcoin Hovers Around New All-Time High, Experts Eye Bullish Future: ‘A Perfect Setup’

Bitcoin Hovers Around New All-Time High, Experts Eye Bullish Future: ‘A Perfect Setup’

Bitcoin (CRYPTO: BTC) flirted with new all-time highs around the $69,000 level Tuesday morning, returning to prices last seen in November 2021.

CoinMarketCap showed Bitcoin hitting a new all-time high of $68,995.53 just after 10 a.m. ET Tuesday, while other platforms such as Coinbase show Bitcoin crossing the $69,000 mark. Bitcoin price calculations vary slightly from platform to platform.

This surge has ignited a firestorm of predictions from industry experts, many of whom foresee a future brimming with possibilities for the world’s leading cryptocurrency.

Speaking with Benzinga, analysts attribute the recent surge to a confluence of factors, including increased demand from institutional investors and the introduction of several Bitcoin exchange-traded funds.

“Bitcoin has crossed the chasm between retail and professional investors,” said Matthew Hougan, CIO of Bitwise Asset Management.

“When you add in the halving, potential rate cuts, and the election, it’s a perfect setup,” he continued, hinting at potentially reaching even higher price points like $100,000 or even $200,000.

The Bitcoin ETF Catalyst: The launch of Bitcoin ETFs has also played a significant role.

Gracy Chen, managing director of Bitget, emphasized the significance of these investment vehicles.

“These are investment products that track the price of Bitcoin and trade on regulated exchanges, making it easier and cheaper for investors to gain exposure to Bitcoin,” Chen said.

Chen further predicts a potential high of $120,000-$140,000 for Bitcoin in this bull run.

Beyond Price, A Focus On Decentralization, Innovation: While many experts focus on price predictions, others such as Pratik Gauri, CEO of the 5ire (CRYPTO: 5ire) blockchain, highlighted the broader implications of Bitcoin’s rise.

“The ascent of BTC to new heights is not merely a milestone but a testament to the unwavering potential of decentralized finance,” he said.

Also Read: Donald Trump’s MAGA Coin Holdings Catapult His Crypto Wealth To $8.79M

Stijn Paumen, co-founder of Helio, echoed this sentiment: “This uptrend is not only attracting new users but is also paving the way for innovative applications of digital currencies.”

He pointed to the recent introduction of Ordinals on the Bitcoin blockchain, highlighting their potential to expand the utility of Bitcoin beyond just a speculative asset.

Caution Amid BTC Optimism: While experts paint a predominantly optimistic picture, some like Anndy Lian, an intergovernmental blockchain advisor, caution against undue exuberance.

“The Bitcoin market is showing signs of overheating and a potential correction,” he warned, advising investors to be prepared for volatility.

Looking Forward, A Dynamic Crypto Landscape: Despite the potential for short-term fluctuations, the long-term outlook for Bitcoin appears promising. With the upcoming Bitcoin halving, Ethereum (CRYPTO: ETH) upgrade and the possibility of spot Ethereum ETFs, the coming months hold significant potential for the entire cryptocurrency market.

 

 

 

Source: https://uk.investing.com/news/stock-market-news/bitcoin-hovers-around-new-alltime-high-experts-eye-bullish-future-a-perfect-setup-3366509

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j