The cryptocurrency environment is complex and multifaceted, continuously influenced by a plethora of different factors. Investor interest, traditional finance, and macroeconomics are the most popular among them, and even long-established coins such as BTC continue to struggle with fluctuations. This isn’t surprising considering the fact that the market is completely decentralized, meaning it isn’t tied to any central bank or financial authority. When you buy Bitcoin online you do it through the means of the blockchain, a network that is not under the control of a single individual either.
The crypto market of 2024 is even more volatile and changeable than the ones of the past couple of years, since, although the market grows older and more mature, there are several factors throwing it off balance. One of them is the presence of the exchange-traded funds, a much-awaited product investors had been anticipating for roughly a decade.
Supply eater
The first Bitcoin ETF applications were launched over a decade ago, but the Securities and Exchange Commission only approved them on January 10th, the day of the ultimate deadline. A day prior to this, the agency’s Twitter account was hacked, and a message appeared claiming that the ETFs were officially approved. The Commission denied the approval, saying that the account had been compromised and that they were working with the authorities to find the one responsible. But just a day later, the official announcement investors were waiting for arrived.
Although the response from the BTC market was not immediate, prices did indeed grow. In fact, they climbed to new all-time highs far exceeding those of 2021. This is important because it happened before the next halving, the event typically associated with price growth in the BTC market environment. While in the past, considerable climbs would be met with equally large corrections and price reductions, this hasn’t been the case so far in 2024. The value did go on a downtrend, but the trend didn’t stay in place for long, and prices began to climb soon after.
BTC’s new all-time high is almost $74k, and most analysts are convinced that it came as a direct result of the ETFs’ role as supply eaters.
Daily inflows
To analyze the marketplace, investors need to work with several different metrics. One of them is the number of daily inflows. 2024 appears to be under the influence of institutional engagement as businesses and retailers begin to invest in digital assets and tokens. The trend is not surprising, as the exchange-traded funds were expected particularly for this reason. Their ability to attract even the more reticent potential investors, who are concerned about the volatility and potential for major capital losses.
Since companies will be especially wary of that, most of them kept their distance from the crypto world, despite being intrigued by it. It doesn’t help that cyber money got something of a negative reputation over the past couple of years due to the fact that many exchanges plummeted after being embroiled in financial scandals. Being associated with illicit activities naturally didn’t do crypto any favors. Getting the green light from the SEC is an important step forward that shows investors they can rely on cryptocurrencies.
Although the decentralized space has always clashed with traditional finance, the latter’s acceptance of the former can only be seen from a positive perspective by most investors. And the results are apparent in the numbers recorded for the daily inflows. Compared to the current levels, the ones recorded during the previous bear market of 2020 appear small. Naturally, investors believe that this isn’t the end and that the numbers will continue to climb in the upcoming months, setting new records and further dwarfing the inflows of previous years.
Predictions
Price predictions are one of the most critical parts of the crypto area. Since the market is generally so volatile and prone to fluctuations, investors have taken to making their own predictions in order to get a better idea of how to construct their trading strategies. As a general rule, however, the best plan when dealing with cryptocurrencies is to remain flexible and be ready to change your strategy at any point. This is why the general belief is that you should never invest more than you feel comfortable and safe losing. Anything above that can make investing a stressful experience.
As of now, investors believe that a path has been laid to allow Bitcoin to achieve the elusive $100K level. Some investors believe that had it not been for the scandals associated with exchange collapses and the increasingly aggressive regulatory landscape, BTC would have climbed to $100,000 in 2021. But since that didn’t come to pass, investors are now eagerly awaiting this price elevation over the course of the following months.
Given the relative stagnation of the crypto environment in 2023, most investors had relatively reserved expectations. The consensus was that the level between $8ok and $100k would only show up around the beginning of 2025, several months post-halving. The ETFs appeared to have yielded moderate results at the time. But this all changed at the beginning of 2024, and it seems now that these initial estimations were too pessimistic and that these levels are much more likely to be achieved as early as 2024.
For 2025, investors believe levels far higher than $100k are possible, with some analysts believing the $300k level is achievable. It remains to be seen how the market environment will behave at that level, as prices have never been so far before. Most investors are unlikely to continue buying at such levels, leaving the whales to deal with the mass of the transactions.
As the numbers grow, the market might become more profitable for miners. There are concerns that the Bitcoin environment will become difficult for miners after the halving and that there will only be two options: relocating to a region where electricity is cheaper or becoming obsolete. But as value keeps growing, there seems to be a light at the end of the tunnel.
To sum up, the crypto environment will go through some challenging times in 2024 and beyond, but great value will undoubtedly come from these movements. Investors must remember that a sound strategy will always be their closest ally.
