A lot of crypto market news have recently bordered around what to expect in the new year. This follows after a prolonged crypto winter that started in early 2022, tarrying long into 2023.
Then again, there was the seeming resurgence that started towards the end of last year. Bitcoin (BTC), alongside other major cryptocurrencies, surged to new 2023 highs in December, fueling even more speculations about what 2024 might hold in store for the crypto asset class. Here are some of the expectations:
Bitcoin to Hit A New All-Time High
The flagship cryptocurrency is expected to touch on levels not previously seen and the major reason for that is its upcoming halving event. Scheduled to take place in April, historical records show that Bitcoin halving usually sends BTC prices to the moon, at least, by 128% on average.
The halving is a process that is embedded into Bitcoin’s code to reduce its inflation rate by half. It happens nearly every four years. Presently, the inflation rate sits at 1.75%, so the event is expected to slash the rate to 0.85% come April. Going by the 128% expected increase in price, however, Bitcoin may reach as high as $99,000 in 2024, a new all-time high.
More so, there is a reason to believe that this year’s halving could potentially be bigger for Bitcoin than it has been in previous years.
Throughout Bitcoin’s history, the rate of freshly mined supply has usually been commensurate with its demand. However, April’s halving will be different. For the first time, there will be fewer coins than were available at the last halving. So, it might not exactly be surprising to see Bitcoin cross the $100,000 mark in 2024.
Meanwhile, some other forces are driving Bitcoin’s price appreciation. But they may not be as significant as that of the halving. Nonetheless, they also played vital roles in reinforcing the positive sentiment currently being seen across the entire crypto market. First is the anticipation for the approval of a spot Bitcoin exchange-traded fund (ETF), which sources claim might happen by January 10. Secondly, figures also show that there is now a fresh interest in novel use cases like Ordinals, a Bitcoin-based equivalent of non-fungible tokens (NFTs).
Ethereum to Flourish
As earlier mentioned, virtually all cryptocurrencies, including Ethereum (ETH) saw gains toward the tail end of 2023. However, its gains of just about 80% felt like no gain when compared to notable altcoins like Solana (SOL) and Avalanche (AVAX). They surged over 900% and 250% respectively, signalling the general momentum of the crypto market.
Ethereum’s luck might be about to change in 2024. It is currently overdue for a bull run as well, and an upcoming upgrade might just be the needed catalyst for its expected jump.
The EIP-4844 upgrade is expected to launch in the second half of the year, bringing so many positives to the network. Expectedly, this upgrade will resolve the issues that have plagued the Ethereum network for a long, reducing transaction costs and boosting throughput to 100,000 transactions per second (T/s).
Inflation and Interest Rates
The U.S. economy undoubtedly impacts the crypto market to a large extent. So much so, that the strong performance of the market in 2023 was because the U.S. Federal Reserve was able to reduce inflation without tipping the U.S. economy into a recession.
It is expected that the Fed will continue to find a middle ground and approach interest rates in the same manner in 2024. In fact, it might begin cutting interest rates sooner and more aggressively than widely anticipated. When this happens, stocks, cryptos and other risk assets will react by rallying.
From all indications, a bull market is imminent and 2024 looks destined to be a year for the history books of crypto.
