The cryptocurrency market, just like all other markets, experiences repeated periods of growth and decline, known as bull and bear markets, which vary in length and strength. Due to the exceptionally volatile nature of digital currencies, no one can predict with absolute accuracy when these phases might start or how long they are going to last.
That’s the case with the latest Bitcoin bull run whose mixed signals are particularly difficult to decipher. As seen in the Bitcoin price chart, Bitcoin has been mostly bullish since the beginning of the year, with investors showing renewed confidence in the leading crypto. However, it’s hard to tell if the upward trend has already subsided or if the best is yet to come and investors will be just as eager to buy Bitcoin in the future as they are now.
Well, according to certain analysts, we haven’t seen the last of this Bitcoin bull cycle. There is a chance that the second half of the year might bring even bigger gains for Bitcoin and possibly push the coin to a striking new record of $150K. But for that to happen, it’s going to take the joint influence of several factors that we’re going to explore below.
Post-halving appreciation
In line with its programming, Bitcoin underwent its fourth halving on April 20, having its mining reward once again slashed in half, from 6.25 BTC to 3.125 BTC. The quadrennial reduction was expected to blow strong gusts of wind in Bitcoin’s sails and cause its price to surge, on account of a lower supply correlated with a constant or increased demand, and the historic price patterns which seem to support this narrative.
To analysts’ surprise, this year’s halving turned out to be an entirely different kettle of fish as Bitcoin’s behavior strayed away from the usual pattern both in the lead-up and following the event. The coin set a new all-time high in March, weeks before the having – whereas all previous peaks were hit in the aftermath of having events – and failed to match this performance since then.
However, since this halving wasn’t like the earlier ones, it’s possible that Bitcoin is yet to see the full extent of the event’s impact and it may take longer than usual for the long-term effects to become noticeable. That is to say, Bitcoin might be in a consolidation stage at the moment in preparation for a much more substantial bull run.
Greater crypto adoption spurred by spot crypto ETFs
The approval of spot crypto exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission represents one of the most important developments that have taken place in the cryptocurrency industry this year.
First, the SEC gave the green light to 11 spot Bitcoin ETFs in January, after a court ruled that the agency lacked solid grounds for rejecting Grayscale’s proposal to convert its GBTC into a spot Bitcoin ETF. Then in May, the regulator gave a favorable verdict for the listing of spot Ether ETFs on several exchange platforms, following increased pressure from investors and House lawmakers.
Although issuers still have to submit updated S-1 forms for their applications and wait for them to be approved by the SEC until they can begin trading their ETF products, this is regarded as a mere formality that shouldn’t take more than a few weeks or months to be addressed.
The greenlighting of both types of ETFs was received with great enthusiasm by the crypto community. The positive sentiment was reflected in the performance of Bitcoin and Ether, with both coins experiencing notable price spikes. But most importantly, having spot ETFs linked to Bitcoin and Ethereum officially approved paves the path for other digital currencies to get their own exchange-traded funds.
These new entries mark a new era of acceptance for crypto as they are bound to spur greater institutional participation and contribute to the development of the market. The positive context is likely to benefit all coins, and particularly Bitcoin which remains the incontestable leader of the cryptoverse.
The Presidential Elections in the U.S.
Crypto has become a major talking point in the race for the 2024 US Presidential Elections to be held in November. Both Donald Trump and Joe Biden, the two main candidates in the elections, seem to have taken a special interest in digital currencies, in contrast with their former stance on the topic. Although Trump has been on the crypto bandwagon for a while, he has become even more supportive of the industry as of late.
Biden, on the other hand, who was not a big supporter of crypto in the past, has started to change his attitude recently, engaging in talks with several important stakeholders in the industry. Having two major political figures put the spotlight on crypto and do so in such a positive and supportive manner can only spell good news for digital assets, and Bitcoin implicitly. Regardless of who wins the November elections, it seems like the political class is already softening its views on crypto.
Macroeconomics
As demonstrated in the past, Bitcoin and cryptocurrencies at large are not immune to external influences. This means that macroeconomics plays a key role in the evolution of the crypto industry and all the assets it comprises. Fortunately, the current situation in the financial scene appears to favor digital currencies as the Federal Reserve is expected to cut rates toward the end of the year. If this happens, investors’ appeal for riskier assets like Bitcoin is likely to increase. The fact that inflation rates remain high also casts a positive light on Bitcoin, which could contribute to an upward trend.
All in all, there are strong reasons to believe that this bull run is far from over. If all the factors that we’ve mentioned converge, they could fuel a swift ascent for Bitcoin and lead the asset to the $150K price point sooner than expected.