Curtain falls: 2023 was good for crypto. 2024 may be better
As the curtain falls on 2023, the evolution of Bitcoin and other cryptocurrencies sets the stage for an impactful 2024 crypto landscape.
Investors, tourists, and analysts saw the year put crypto in a tough spot as the US Securities and Exchange Commission (SEC) pounced on many crypto exchanges and the surprising surge of Bitcoin in the last quarter of the year. However, the market has remained optimistic as momentum continues to gather into what may culminate into a bull run in 2024.
2023 was the year of correction
Following a turbulent 2022 that saw the prices of Bitcoin and other cryptocurrencies crash to almost irredeemable prices, 2023 offered succour to market participants.
Bitcoin and Ethereum rose 160% and 90% respectively during the year. In early December, the price of the benchmark cryptocurrency surged past $44,000. It has now settled close to $43,000, a 155% gain over the last 12 months. Altcoins like Solana and Avalanche had a more phenomenal run. Solana hit a whopping 880% jump while Avalanche is up 250%.
Even the global crypto market capitalization witnessed a gradual recovery throughout the year with its current value at $1.59 trillion, up 112% over the same period.
What is fuelling this price growth has been linked to hopes that the SEC will approve the spot Bitcoin exchange-traded fund (ETF) on its table, the Bitcoin halving event, and a much more stable market due to regulation.
ETF approval by SEC may crank up good fortunes
In the last few months, the conversations surrounding the possible approval of spot Bitcoin ETFs by the SEC have continued. According to Reuters, there are currently 13 firms with pending applications for the investment vehicle. Firms like Blackrock, Franklin Templeton, and Fidelity have submitted their fillings to the regulator.
A Bloomberg analysis has noted that the chances of an approval by January 10, 2024—the SEC’s statutory deadline for a decision on three applications—is at 90%.
If approved, the investment vehicle will help to add legitimacy to cryptocurrencies in the eyes of market enthusiasts who are sceptical about the market. While a Bitfinex analysis has predicted that 2024 may see crypto users jump to between 850 and 950 million, the availability of ETFs may allow more investors from the traditional sector to crossover to invest in cryptocurrencies.
An SEC approval will also boost the general sentiment surrounding crypto as merely a speculative asset to create an outlook of a productive asset class. It doesn’t matter which firm gets the approval first, an ETF will magnet more institutional investors to the market and this will help boost the prices of Bitcoin and other cryptos.
Bitcoin bull, Michael Saylor, has said that the approval, if it happens, may be the “biggest development on Wall Street in 30 years.”
Accumulation of Bitcoin has continued
Despite the downturn of prices earlier in the year, on-chain data has continued to point to Bitcoin stakeholders’ non-stop accumulation of the pioneer token.
Data from Glassnode showed that long-term holders have remained bullish on the possibility of a bull run in the next few months. Bitcoin whales or holders of at least 1,000 BTC have been steadfast in their accumulation in a way that has preceded big rallies.
Microstrategy, a business intelligence firm prominent for being bullish on Bitcoin has continued to accumulate. The company bought an additional 14,620 BTC on December 27, bringing its total holdings to 189,150 Bitcoin.
Bitcoin Halving is coming
An event that may send the price of Bitcoin to the moon in the next quarter is the halving—an event that happens every four years meant to cut the supply of Bitcoin and fight inflation on the token. This event will occur in April 2024 crypto and may help push the price of BTC upward.
The impact of a Bitcoin scarcity cut always reverberates across the market, with altcoins also seeing mostly positive price gains.
Market analysts are predicting that the upcoming halving event may be the most important yet. The price gains in December may explain an anticipation for the next bull cycle that may begin after the halving event.
As we enter a new year, the momentum that has already begun to gather in the last quarter of 2023 will cross over into 2024. The next year looks promising. If investors can maintain positive sentiment and volumes, the current uptrend will extend into the next few months.