Bitcoin has recorded more than sixty per cent gains in the year 2024 thanks entirely to the approval of spot ETF in January and the recent halving event. For instance, developers are currently working on adding new features to the Bitcoin network – this might push prices higher. Interest rate cuts, easing regulation or November’s election could also prop up this overbought asset.
Two Key Events Have Triggered A Rally In Bitcoin
First of all, the ETF was approved at the beginning of the year, and secondly, the Bitcoin halving event later. This red-hot crypto was up by over 60% on a year-to-date basis as of Friday, with it trading about 6% lower than its peak price set way back in March.
Even if both are expected to push bitcoin’s price higher, now they are in the rearview mirror leaving investors pondering as to where else they can find more upside in this situation; analysts reiterate that there are a number of routes via which bitcoin prices might still rise.
Causes & Impacts Of The 4 Catalysts:
1. Interest-rate cuts
Investors are keen on what the Federal Reserve intends to do with interest rates in the hope that stocks can benefit by going up. The same momentum applies to bitcoin which behaves like a risky asset that goes up when rates of borrowing fall. The red-hot crypto could also get a boost from interest-rate cuts, experienced loosened shifting regulation, and November’s election.
In fact, it was largely due to the ultra-low interest rates throughout 2021 that bitcoin hit record-level prices that year, dropping following this move when the Federal Reserve tightened its monetary policy.
Galaxy’s CEO, Mike Novogratz told Bloomberg in the previous month that the ETFs were being massively adopted besides halving taking place in the first quarter. This therefore means that people will start focusing on the Federal Government. He further said Bitcoin is anticipated to remain within the range of $55,000 to $73,000 until the short-term interest rates are decreased.
2. Shifting Regulation
The crypto community is currently seeking clarity on the regulatory front too, a long-time impediment to Bitcoin. For instance, the eventual approval of spot ETFs by the Securities and Exchange Commission was a consequence of losing in court.
“However, the legal thoughts or attitude towards cryptocurrency appear to be changing,” highlighting some of the potential things that could affect Bitcoin in future, Owen Lau an executive director at Oppenheimer, told CNBC during the first week of May, including the stablecoin bill that is pending.
The crypto industry just got a boost as the US House of Representatives passed a wide-ranging regulatory framework which experts say is a victory for the sector. It is not certain that the Senate will pass it but if it does, then at least those in the cryptosphere will have more understandable regulations.
3. November’s Election
According to Novogratz, actual regulatory clarity is expected after the presidential elections regarding how different the two presidential candidates are in terms of support for the sector. As he observed, whereas Biden has tough policies against crypto, Trump’s support for the industry has been increasing.
Geoff Kendrick of Standard Chartered had an opinion in May that Donald Trump’s election would somehow affect Bitcoin in a positive way. According to him-
“Bitcoin prices will also probably rise due to heightened anxiety about U.S. deficit growth and borrowing patterns as investors look for other investments. In a recent interview, Kendrick stated that there is no way to reduce federal expenditure in either candidate’s agenda.”
4. Expanded Use
Although there are changing attitudes about Bitcoin, the cryptocurrency is changing as well. Developers have been labouring to introduce additional capabilities in the Bitcoin network, according to Bloomberg reports. This will enhance the successful implementation of other related projects which consider digital coins as more than pure speculative tools.
Just to mention, however, the Ordinals protocol that has been launched allows more than just Bitcoin to be stored on the BTC blockchain; instead, it allows one to begin trading assets such as NFTs. According to X, the Ordinals market recorded a daily trading volume of $3.42 million in mid-May (Gracy Chen, Bitget Managing Director).
Was this piece informative?
Go and check ReadingCrypto for more such amazing stuff.
