What will Bitcoin and the digital currency market look like in 2024?
The cryptocurrency recovery is one of the breakout stories of 2023, especially after the market turmoil of 2022.
After plummeting in 2022, Bitcoin price has recovered strongly, by the end of 2023 reaching approximately 43,000 USD/Bitcoin (at times reaching nearly 45,000 USD/Bitcoin), an increase of 2.5 times compared to the end of the year. 2022.
From the beginning of the year to the end of 2023, Bitcoin has increased by 164% and is trading above the threshold of 40,000 USD/Bitcoin. The currency has posted gains that outpace traditional assets, including gold (up 10%) and the S&P 500 composite stock index (up 20%).
According to data from electronic trading site CoinGecko, Bitcoin also increased its market share from 38% to more than 50% in the global cryptocurrency market. Also in 2023, the total capitalization of the entire cryptocurrency market increased from 871 billion USD at the end of 2022 to 1,700 billion USD.
Bitcoin
After a strong recovery in 2023, Bitcoin and the digital currency market will continue to attract investors' attention in 2024.
Kelvin Koh, co-founder and managing partner at investment firm Spartan Group, said that despite the “aftershocks” of 2022, 2023 is looking surprisingly good for Bitcoin. This electronic currency is also on the verge of moving into a new cycle.
Meanwhile, Mr. Kyla Curley, cryptocurrency expert and partner at global consulting firm StoneTurn said: "2023 is the year of recovery for the cryptocurrency market."
According to analysts, a key component contributing to that resilience is the way US authorities, especially the Department of Justice, have flexed their enforcement mechanisms towards cryptocurrencies, even when not There are clear regulations. Like the rest of the financial world, cryptocurrencies are buoyed by an improving macroeconomic picture with cooling inflation, a growing economy and the long-awaited end to the interest rate hike cycle of the US Federal Reserve (FED).
Experts say that most of Bitcoin's increase came at the end of the year, when information about the possibility of the US allowing the establishment of a spot Bitcoin ETF and hopes for looser monetary policy added fuel. quality for investors.
“Most of Bitcoin's 55% increase in the fourth quarter of 2023 was due to bets that the US would approve the trading of spot Bitcoin ETFs. This has attracted inflows from retail as well as institutional investors, as the market prospect of easy access to digital assets on a regulated stock exchange becomes more viable. ”, experts said.
Many experts see loose monetary policy as a factor supporting Bitcoin - an asset considered a risky investment channel. Meanwhile, there are also those who see Bitcoin as a "safe haven" when geopolitical instability increases.
According to Bloomberg ETF analysis, the possibility of approving a spot Bitcoin ETF before January 10, which is the US Securities and Exchange Commission's (SEC) statutory deadline to make a decision on some application is 90%.
According to Michael Saylor, co-founder and executive chairman at MicroStrategy, the approval of a Bitcoin spot ETF could be the biggest development on Wall Street in three decades.
According to the SEC announcement, approved ETFs (Exchange Traded Funds) include BlackRock, Ark Investments and 21Shares, Fidelity, Invesco and VanEck, among others. Some funds started operating as early as January 10.
In a statement, SEC Chairman Gary Gensler said that approving ETFs is “the most sustainable path forward,” but added that the agency does not support Bitcoin, which is highly risky and vulnerable. fluctuations.
Experts say this marks a turning point for the world's largest cryptocurrency and the cryptocurrency industry in general.
These funds are expected to become a game changer for Bitcoin, helping institutional and individual investors gain access to the world's largest cryptocurrency without directly holding it. This will become a great motivation for the cryptocurrency industry after a period of a series of scandals.
Previously, many companies had applied for Bitcoin ETFs since 2013, but the SEC rejected them on the grounds that they were susceptible to manipulation. However, in August 2023, a court said that the SEC was wrong to reject Grayscale Investments' ETF registration application, forcing the agency to change its stance.
Cryptocurrency advocates believe that the SEC's move with a Bitcoin ETF will greatly benefit investors, while bringing the industry closer to the world of traditional finance. This can also be seen as a milestone of maturity for a young industry, entangled in many controversies and risks like cryptocurrency.
“The SEC's move is a positive for the institutionalization of Bitcoin as an asset class,” said Mr. Andrew Bond, Managing Director and senior financial technology analyst at Rosenblatt Securities. ETF approval will further legitimize Bitcoin.”
According to Georgetown University associate professor Jim Angel, a spot Bitcoin ETF could pave the way for other innovative products in the virtual currency space. For example, many companies have begun applying to open similar funds for Ether - the world's second largest virtual currency.
"Once the barrier has been removed, it will be difficult for the SEC to continue to just say 'no' to proposals related to virtual currencies," Mr. Angel assessed.
As noted, Bitcoin prices did not fluctuate much after the SEC's decision was announced, because the expectation of this approval has pushed Bitcoin prices up sharply since the end of last year. In recent months, the price of Bitcoin has increased more than 70%, reaching its highest level in nearly 2 years.
Data from Coinmarketcap shows that at the end of the afternoon on January 10 (US time), Bitcoin price increased 3%, reaching 47,300 USD. At nearly 8:00 a.m. on January 11 (Vietnam time), Bitcoin price increased nearly 1.5% compared to 24 hours ago, trading at nearly 46,550 USD. Over the past week, Bitcoin price increased about 8.5%.
Many commentators believe that the loosening of monetary policy by central banks in 2024 will significantly support the price of Bitcoin, which is considered a risky asset.
Markus Thielen, head of research at Matrixport, shared insights on expectations for Bitcoin spot exchange-traded fund approval in January 2024 and emphasized that Bitcoin's value could increase exceed $50,000 by the end of the month.
Similarly, derivatives exchange Bitget predicts Bitcoin could hit $100,000, amid other predictions pointing towards even higher peaks.
Meanwhile, some people see Bitcoin as a kind of “safe haven” for investing in times of geopolitical conflict. Cryptocurrency financial services company Matrixport predicts that Bitcoin will reach $63,140 by April 2024 and $125,000 by the end of next year. The company's report said that the macro environment is expected to remain a strong driver for cryptocurrencies. Inflation is expected to continue to decline, allowing the FED to begin cutting interest rates. This factor along with rising geopolitical tensions will push bitcoin to new highs in 2024.
In a report last month, Standard Chartered Bank maintained its forecast that Bitcoin prices will reach $100,000 in 2024. Virtual currency financial services company Matrixport last week said bitcoin prices would reach $63,140 in April. /2024 and 125,000 USD by the end of 2024.
