4 things crypto investors should be watching in 2024

The first half of 2024 was quite eventful for cryptocurrency. According to Dow Jones Market Data, Bitcoin’s value has dropped by more than 18% since reaching its all-time high of $73,798 in March. The United States’ first spot bitcoin exchange-traded funds began trading in January, while in May, American authorities made significant progress toward legalizing ether ETFs.

The Bitcoin network underwent its fourth “halving” event in April, when miners were rewarded with 3.125 bitcoins instead of the 6.25 tokens they had previously received for successfully completing a block.

As per Dow Jones Market Data, during the first half of the year, ether witnessed a 50% increase and bitcoin had a nearly 46% gain. Even then, those increases are still less than what the assets did in the first half of 2023, when ether increased by 60.7% and bitcoin increased by 83.6%.

Speaking with a few industry insiders to find out what they think the remaining months of this year would bring in terms of cryptocurrency.

Rate-cut path

During the second half of the year, the macroeconomic climate is probably going to continue to have a significant impact on cryptocurrency values. Though possible interest rate cuts by central banks would be a boon for digital assets, worries about a worldwide downturn are likely to affect bitcoin, according to André Dragosch, head of research at ETC Group.

As Dragosch noted over the phone, “you’ve seen in the past that periods of increasing money-supply growth were associated with bitcoin bull markets,” while periods of declining money-supply growth were linked to bear markets.

In a recent analysis, analysts at CCData reiterated the idea, stating that in the absence of rate reductions, “economic growth will remain slow, limiting outside investment in speculative markets.”

Based on data from the CME FedWatch Tool, traders are currently pricing in two rate cuts by the Federal Reserve by the end of this year, with the first one occurring in September. However, based on the “dot plot” prediction provided in June by policymakers, Fed officials themselves anticipate only one cut by year’s end.

Mt. Gox repayment

Following the announcement by the insolvent digital asset exchange that it will begin paying out bitcoin in July to creditors who lost money in an asset hack of the now-defunct platform more than ten years ago, cryptocurrency investors will be closely monitoring the quantity of bitcoin sold by creditors of Mt. Gox.

With the token currently trading at a significantly higher price than it did a dozen years ago, the news has been placing pressure on bitcoin as investors are concerned that Mt. Gox’s creditors may decide to dump the bitcoins they get.

Mt. Gox, the largest digital asset exchange globally, was one of the first cryptocurrency exchanges to launch in 2010. Over 600,000 bitcoins were taken during the 2011 breach, and the platform filed for bankruptcy in 2014. Two Russian nationals were accused by the Justice Department last year of planning to launder bitcoins obtained from their Mt. Gox hack. The exchange said in September of last year that it will have to make base repayments, early lump-sum repayments, and interim repayments by October 31, 2024.

Repayments in bitcoin and bitcoin cash are scheduled to start this month, despite the fact that some Mt. Gox investors claimed earlier this year that they had already received some cash payouts for stolen funds. As of Wednesday, Arkham Intelligence data shows that the exchange has approximately 141,687 bitcoins, valued at approximately $8.5 billion.

Nevertheless, global head of research at NYDIG Greg Cipolaro says the market might not have overestimated the impact of the real selling.

About $1.5 billion worth of bitcoin is anticipated to hit the market upon repayment, according to NYDIG. Despite being a substantial sum, Cipolaro stated in a recent note that given the daily trading volume of the token—which varies from $1 to $1.5 billion for USD-quoted bitcoin and $4 billion for USDT-quoted bitcoin—it would not have much of an effect on the price of bitcoin.

U.S. presidential election

The outcome of the US presidential election in November and the new administration’s approach to establishing policies regarding digital assets will be keenly observed by cryptocurrency investors.

It seems that during this election season, cryptocurrency has grown in importance.

The presumed Republican front-runner Donald Trump has changed his views on cryptocurrencies; after previously criticizing the currency, the former president is now supporting the sector. In addition to meeting with executives from cryptocurrency mining businesses and purportedly pitching himself as a “crypto president,” the Trump campaign began collecting cryptocurrency donations in May.

Many observers interpreted the May vote by a large number of House Democrats to adopt a regulatory package supported by the industry as a hint that the party is trying to avoid being perceived as anti-crypto by voters.

Crypto ETFs

Several media sites have speculated that the SEC may approve the first spot ether exchange-traded funds as early as mid-July.

The New York Stock Exchange, Nasdaq, and a Cboe subsidiary exchange submitted requests for rule amendments in May, which would have allowed them to offer spot ether ETFs. The SEC approved the applications. However, potential issuers’ registration statements have not yet been approved by the government.

Even while it’s generally agreed that there won’t be as much demand for ether ETFs as there is for bitcoin ETFs, analysts still predict that the introduction of these products would sharply increase ether’s price and increase demand for cryptocurrencies in general. Additionally, investors will keep an eye on the bitcoin ETF investment flows.

Head of strategy at Kraken Thomas Perfumo stated, “Even though there are bitcoin ETFs available in the U.S., it doesn’t mean that people, particularly registered investment advisors or [their] clients… are actually getting the exposure that they’re able to get right now.”

Quick access to cryptocurrency

After falling 0.9% over the last seven days to hover around $60,389, Bitcoin has now dropped more than 18% from its record high of $73,798 set in March. According to Dow Jones Market Data, ether’s price has dropped 2.3% in the last seven days to approximately $3,309.

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