Although digital currencies have proven their unpredictability and volatility repeatedly – with the latest crypto winter serving as the most eloquent example in this respect, industry experts and analysts rush to share their predictions on the future of crypto every year. Everyone is dying to figure out what might come next in terms of trends, price performance, regulation, innovation and other industry developments.
Will regulators continue to crack down on crypto? Is Bitcoin going to crash or soar? Is it still smart to include digital assets in a portfolio and buy Bitcoin online or should traders and investors look elsewhere for investment opportunities? It is not an argument for not asking questions such as “what is going to happen to the cryptocurrency market?” Knowledge is power and thus all you need is the numbers to understand which asset is having the hot run or having no run at all, it will be easier for you to champion crypto waters. Of course, let’s begin with this: the prophecies made by experts and those devoted to crypto religiously. Are they close to the truth or simply a misconception?
Rise in Institutional Interest
On December 11, crypto broke one of the most significant thresholds of its evolution, namely, to be greenlighted the very first spot Bitcoin exchange-traded funds (ETFs) by the SEC of United States. After the prolonged wait, the Bitcoin exchange rate increased to $49,000, which was the highest in the last 6 months (since December 2021). The flag-me it crypto minted the victory but was unable to continue the momentum and the price went back to the pre-approval price range. This was also inevitable knowing that the high adrenaline and over-excitement that people had been harboring you for months were certainly behind the remarkable surge.
On the other hand, Bitcoin’s short-term curve performance is not the frontier to be considered. What is of high importance here is the potential impact of the approval in the long term which gives a signal that the blessed future for Bitcoin and the whole crypto industry may be expected. The launch of BIT ETFs marks a concurrent shift in appetite for cryptocurrencies from institutional investor.
The endorsement from major asset management companies like Blackrock, Grayscale, Invesco, VanEck and others provides more exposure to Bitcoin for those who want to invest in the crypto asset and opens the door to further institutional adoption of crypto in 2024. Apart from giving the crypto market more legitimacy and recognition, increased institutional participation can ensure more liquidity and reduce volatility, which could help the industry mature faster. This also raised hopes that the SEC might give the green light to spot Ethereum ETFs sometime in the future.
The Halving Hype
First, as spot Bitcoin ETFs have been introduced, monthly Bitcoin halving is the next likely headline for the crypto community to follow up. The exploding into the spotlight thing of this essential station on the way to Bitcoin’s development features the enormous rush of enthusiasts. The fact can be introduced in a more interesting way: most of you probably already know what is halving just because the Bitcoin system ‘undergoes a periodical procedure every four years.’ This halves the amount of mining, so you put half of the reward for mining Bitcoin aside, thus controlling the number of coins entering circulation to maintain scarcity.
In the halving, the fact that they have always been during the significant increase of the Bitcoin prices is one of the interesting things. The gruesome crypto history is clear that every time a halving yet has driven Bitcoin bubbles to the skies. Contrasting this, we have the example of the first halving which transpired in 2012 and triggered the hike in price from $12 to above $1000 in less than a year. Many analysts presume that the prism discovery to be held in April 2024 will affect the price volatility of the crypto in the same way, which is fundamental. If supply falls, it is less likely for demand to fill in the gap and so higher prices are expected.
Nevertheless, it cannot be straightforwardly said that halving is the only reason for the upsurge in the market trend because there are other variable factors to be considered including investor interest, competition, regulations and etc. This implies that primarily relying on Bitcoin in the hope that the price will go upward this year may not be the right thing to do.
Read Also: Taking the First Step into Cryptocurrency: Understanding How to Buy Ripple
Regulatory Ripple
The road to crypto regulation continues along with the hurdles it involves. Despite lawmakers’ best efforts, the crypto regulations waters are murky, to say the least, with different standards and guidelines being implemented in different parts of the world. In the U.S., crypto is treated as a commodity, whereas in countries like China, crypto trading and mining are completely banned. In some jurisdictions, digital assets are not regulated at all.
With cryptocurrency being a new and extremely complex asset class that doesn’t resemble any of the traditional assets, regulating it presents a real challenge. One can say that the issues governments have with creating legal frameworks for crypto represent a normal part of the growing pains of the industry. So, it’s normally going to take a while for the current regulatory mosaic to turn into a unified landscape.
The only thing that pundits are sure of at the moment is that more regulation is coming to the crypto market in 2024. EU’s Markets in Crypto-asset (MiCA) is expected to introduce new rules for stablecoins issuers while other countries around the world will likely focus their efforts on advancing their crypto-related legislative projects.
Final Words
From the lack of a crypto crystal ball to tell us the future, we can only rely on experts’ estimates and calculations to guide us on our journey into the crypto space. So far, the outlook for 2024 for the crypto sector is rather optimistic. With the approval of spot Bitcoin ETFs already achieved, the next Bitcoin halving just around the corner and more regulations coming to the crypto space, we have enough reasons to believe we’ve got some pretty exciting months ahead of us. Whether you choose to listen to the experts and trust in their good judgment or not, checking the latest predictions is a good way to get a feel of the pulse of the market.