Some senior executives in the cryptocurrency industry insist that a new bull market for Bitcoin has begun, while some institutional investors who are extremely optimistic about Bitcoin are shouting that Bitcoin will break through the $100,000 mark in 2024 and hit a record high. Bitcoin can be said to have started a "mad bull" market this year. It has soared by more than 120% during the year and has currently exceeded the $40,000 mark (the highest point since May 2022).
Many investors are optimistic that this rally will continue into 2024. Expectations that a Bitcoin spot ETF will be approved in the United States next year, coupled with rising expectations of an interest rate cut by the Federal Reserve, have sparked excitement in the cryptocurrency market and pushed Bitcoin prices sharply higher.
“It feels like (2023) is the year to prepare for the upcoming cryptocurrency bull run, and people are very hopeful about 2024 and 2025,” Ledger CEO Pascal Gauthier said in an interview with the media last week. The last all-time high for Bitcoin, a cryptocurrency, was nearly $69,000 in November 2021.
Since hitting a historic high of $69,000, the cryptocurrency industry has been hit by a series of problems, from the Federal Reserve's aggressive interest rate hike cycle and the collapse of various investment projects, to the bankruptcy of the FTX trading empire and the criminal trials of some crypto companies. FTX, once one of the world's largest cryptocurrency exchanges, faces more than 100 years in prison after its founder Sam Bankman-Fried was convicted of seven counts of criminal fraud in the United States.
Meanwhile, Binance CEO Changpeng Zhao pleaded guilty to criminal charges and resigned as CEO of the company as part of a $4.3 billion settlement with the U.S. Department of Justice. Many in the cryptocurrency industry believe that the conclusions of these two important cases can be said to have completely drawn a clear line between related issues plaguing the crypto market.
David Marcus, CEO of Lightspark, said: "I think once you get out of the speculative phase, I think we've almost done the important things, although maybe not quite yet. Then you can have real builders focusing on the technology and the problems that can be solved in the world, rather than just a giant digital casino for people to transact."
Marcus, the former head of Facebook’s failed Diem stablecoin project, is now working on improving Bitcoin’s technology as a payments network.
Therefore, in the view of senior cryptocurrency industry executives such as Marcus, now that these issues have been resolved, investors should focus on what the industry considers to be positive developments. First, there is growing excitement that the first U.S. Bitcoin exchange-traded fund (ETF) may soon receive approval, which may attract large traditional institutional investors who have previously not wanted to engage with cryptocurrencies.
"I think what this ETF is really about is that Bitcoin is going to become a mainstream way of investing, and that's what people have been waiting for," said Ledger CEO Gauthier.
The second important development node is the Bitcoin halving, which occurs approximately every four years, with the latest plan scheduled for May 2024. Halving is when Bitcoin miners (i.e. the entities that maintain the Bitcoin network) see the rewards for their mining efforts cut in half. This puts a cap on the supply of Bitcoin – there will always be only 21 million coins – which is often a factor behind new rallies.
"Many market participants expect a cryptocurrency bull market to occur after the Bitcoin halving, but given the news about ETFs, we are likely to have a bull market before most crypto investors stay on the sidelines, which could lead to significant price increases." said Vijay Ayyar, vice president of international markets from cryptocurrency exchange CoinDCX.
Some analysts have boldly called for the Bitcoin price to exceed the epic price mark of $100,000 in 2024.
The first is that Standard Chartered last week reiterated its prediction published in April that Bitcoin would reach $100,000 by the end of 2024. The agency said this will be driven by the approval of numerous Bitcoin ETFs. According to CoinDesk statistics, this means that the price of Bitcoin will increase by approximately 160% from last Friday’s trading price of approximately $38,413.
Matrixport, which calls itself a crypto financial services company, released a prediction report last week predicting that Bitcoin will reach $63,140 by April 2024 and approximately $125,000 by around the end of next year. “According to our inflation model, the macro environment is expected to remain a strong driver of cryptocurrency prices. Inflation is expected to decline again, which may prompt the Federal Reserve to start cutting interest rates.” “Coupled with geopolitical countercurrent factors, this healthy monetary policy support should push Bitcoin to new highs in 2024.”
The current market consensus is that the Federal Reserve will cut interest rates by at least 125 basis points next year (equivalent to five 25 basis point interest rate cuts). This bet seems to have paved the way for a further decline in U.S. bond yields and a continued rebound in the stock, bond and commodity markets.
Analysts’ comments generally mention that easing monetary policy, that is, starting an interest rate cut cycle by the Federal Reserve and other central banks, can be said to be the greatest support for Bitcoin. Bitcoin is viewed as a risky asset, but at the same time, some investors see it as a "safe-haven" asset against global uncertainty, especially in times of geopolitical conflict, where they can put funds into the "decentralized" cryptocurrency.
When asked whether Bitcoin would reach $100,000 in 2024, Gauthier emphasized: "It is extremely possible." But he declined to give a specific price prediction. "What we're seeing are strong fundamentals," he said.
Ayyar, vice president of international markets from cryptocurrency exchange CoinDCX, said that the price of Bitcoin is “consolidating” below the “critical level” of $38,000, which is positive for Bitcoin. He said that once this level is broken, buying power may push Bitcoin to rebound significantly to between $45,000 and $48,000.
However, he warned that if the product (Bitcoin ETF) is rejected by US regulators again, the current Bitcoin rally may come to an end and the correction will continue. He said that the current Bitcoin rally is largely based on the expectation that the Bitcoin spot ETF will be approved. Ayyar said: “A blanket rejection of the Bitcoin ETF could also wreak havoc on the cryptocurrency market, so it will definitely need to be watched closely.”