The bull market has arrived, and these 6 major events will catalyze new investment opportunities.
Written by: Gracy Chen, Managing Director of Bitget
Compiled by: Luffy, Foresight News
We have been in a bear market for a long time. It’s like going through a long winter, and hats and gloves are a must at all times. You may often ask yourself: “When will the clouds clear up and the sun appear?” But at this moment, my mood has changed. This isn’t just anticipation of a coming bull market; instead, I’ve taken off my jacket and put on a T-shirt. I think the bull market has arrived.
2023 is an exciting year for the crypto industry. As of December 5, the total cryptocurrency market capitalization surged nearly 93% to $1.53 trillion from $794 billion on January 1, 2023. As 2023 comes to an end, it’s time to look ahead and turn our focus to next year. In this article, I summarize the most anticipated important events in the crypto industry in 2024.
In 2024, I believe there are six different catalysts that will be areas of interest to market participants that will create new investment opportunities.
Spot Bitcoin ETF approved in US
In October 2021, the U.S. Securities and Exchange Commission (SEC) approved the establishment of the first Bitcoin-based ETF (exchange-traded fund) in the United States. But U.S. financial regulators have not approved a Bitcoin spot ETF, and I expect that to change soon.
On November 30 this year, SEC officials met with representatives of Grayscale, a well-known crypto asset management company, which has been seeking to convert its existing Bitcoin trust fund Grayscale Bitcoin Trust into an ETF. The company won a key court case against the SEC in August, legally forcing the SEC to review its Bitcoin ETF application.
A day earlier, financial regulators, BlackRock and Nasdaq held a formal meeting to discuss ETF-related matters. BlackRock submitted a spot Bitcoin ETF application to the SEC in June, and applied to the SEC for a spot Ethereum ETF in November. In addition to the above developments, Bloomberg Intelligence ETF analyst James Seyffart said he believes there is about a 90% chance of a Bitcoin ETF being approved early next year. Analysts believe the approval date will be between January 8 and 10.
The current market sentiment is optimistic, and the U.S. Bitcoin spot ETF will play an important role as institutions seek to diversify their asset allocation through Bitcoin investment.
Ethereum Cancun Upgrade
A major upgrade to the Ethereum network is usually one of the most important events of the year. The Cancun upgrade is expected to take place in the first quarter of 2024, introducing the long-awaited proto-danksharding.
Proto-danksharding is a prototype of the iteration of danksharding technology developed by Ethereum. Due to Ethereum’s limited scalability, transactions can become slow and expensive at peak times. Developers plan to leverage sharding, which divides the network into smaller parts that can independently execute smart contracts and process transactions.
After the Cancun upgrade, Rollup-based L2 networks such as Arbitrum One, Optimism, and Base can more cheaply add data to the Ethereum mainnet via Blobs, which can be sent and appended to blocks that are inaccessible to the Ethereum Virtual Machine. . Through blobs and transactions carrying blobs, L2 can cost-effectively store and retrieve off-chain data on the Ethereum mainnet, making L2 transactions even cheaper after the Cancun upgrade.
The Cancun upgrade will also provide other benefits to Ethereum users, including optimized block space, reduced data storage costs, improved cross-chain communication, and enhanced security features through the reduction of SELF-DESTRUCT opcodes.
The United States ends interest rate hikes
Since the beginning of 2022, the federal funds rate has continued to increase until the third quarter of 2023, when the Fed set out to combat inflation in the United States. Between January 2022 and August 2023, the effective interest rate increased from 0.08% to the current target rates of 5.25% and 5.5%.
With U.S. inflation falling from a high of 9.1% in June 2022 to 3.2% in October 2023, I believe the Fed’s rate hike cycle is coming to an end. Markets expect the first rate cut to occur as early as May 2024. Driven by this, positive market sentiment in the cryptocurrency industry is expected to strengthen, thereby enhancing the appeal of Bitcoin and other crypto assets.
Why is this important to us? If we think of various financial markets as a series of pools at different levels, then at the highest level, the U.S. currency and bond markets are the largest pools.
Currently, high interest rates are filling that pool with a lot of “water.” However, once interest rates are lowered, water starts flowing to smaller pools of funds, such as stocks and cryptocurrencies. When interest rates fall, the bond market becomes less attractive and people are more likely to invest their money in assets that offer higher risk and reward, such as cryptocurrencies.
Circle IPO
Circle is the issuer of the U.S. dollar stablecoin USDC. According to a report in November 2023, Circle is preparing to go public via an initial public offering (IPO) early next year. This will make Circle the first stablecoin issuer to go public, a move expected to drive adoption of crypto stablecoins.
However, this isn’t Circle’s first attempt to go public. A year ago, it terminated an agreement with Concord Acquisition Corp, a special purpose acquisition company (SPAC). The reason for the termination was reportedly the SEC’s failure to approve the deal.
Bitcoin Halving
Like Ethereum’s major upgrade, the Bitcoin halving is one of the crypto industry’s biggest events of 2024. However, unlike Ethereum upgrades, Bitcoin halvings occur approximately every four years.
The halving will reduce the number of new Bitcoins miners receive from each newly mined block by 50%. By cutting new coin issuance in half, Bitcoin will become more scarce and inflation will decrease.
As supply and demand dynamics strengthen, I expect the price of Bitcoin to soar after the halving is over. In fact, all previous halvings have been accompanied by cryptocurrency bull runs.
FTX case is about to be resolved
FTX founder Sam Bankman-Fried was convicted of multi-billion dollar fraud in November. As part of the resolution process, the court has approved the liquidation of nearly $880 million in assets to repay creditors. These developments indicate that FTX is gradually entering the exchange restructuring stage. The resolution of the matter is expected to restore some investor trust and increase regulatory clarity, potentially attracting new retail funds to the industry. SEC Chairman Gary Gensler expressed his willingness to consider restarting FTX, provided that new leadership succeeds SBF and the exchange operates within the law. If approved by regulators, such a reboot could help increase trust in FTX, or at least mitigate the negative impact of the scandal.
The Road to the Next Cryptocurrency Bull Run
With the approval of a Bitcoin spot ETF in the United States, the Ethereum Cancun upgrade, and other important catalysts, we are likely to witness a Bitcoin super cycle in 2024. However, there are also potential negatives that could emerge next year.
For example, the now-defunct Mt.Gox exchange is expected to repay creditors 137,000 BTC, and the U.S. government plans to liquidate Bitcoin seized in the Silk Road case. These events can create selling pressure and could cause cryptocurrency prices to fall. Additionally, the global regulatory environment for cryptocurrencies remains uncertain, setting the stage for unforeseen events.
On the other hand, I believe that the liquidation of Bitcoins seized in the Mt. Gox case and the U.S. government’s Silk Road case could signal the emergence of a true bull market. This is likely to be accompanied by widespread adoption of cryptocurrencies and the introduction of innovations. Whatever the future holds, the important thing is to DYOR and prepare for a potentially epic bull run in crypto.
