By Jason Shubnell and Brian McGle
Translation: Blockchain in Vernacular
The launch of a Bitcoin ETF has helped propel the world's largest cryptocurrency to a record high this year. The U.S. presidential election continues to rock the market, with Trump embracing cryptocurrencies and Biden not yet making a clear stance. Here's a quick review of the main market milestones in 2024 and a look at the market outlook before the end of the year.
It’s been an extraordinary year for crypto markets, and we’re only halfway through 2024. The price of Bitcoin BTC +2.53% has significantly outperformed the S&P 500, rising more than 46% in the first six months compared to the S&P 500’s 15%.
On top of that, the SEC approved the first spot Bitcoin exchange-traded funds (ETFs), which significantly increased institutional investment in cryptocurrencies. Meanwhile, Bitcoin went through its fourth halving, an event that occurs approximately every four years after every 210,000 blocks are mined.
But at the start of the second half of the year, Mt Gox disrupted the market again. Last month, the defunct bitcoin exchange announced that it would begin distributing more than $9 billion to its creditors in early July. Those payments — in bitcoin, bitcoin cash and fiat currencies — began last Friday, briefly sending bitcoin prices down to below $55,000.
Although the market may be hit in the short term, some market makers and investors remain optimistic about Bitcoin's long-term prospects. Here is a brief timeline of major market milestones in 2024, as well as an outlook for the crypto market before the end of the year.
1. Bitcoin ETF debuts on Wall Street
The U.S. Securities and Exchange Commission (SEC) approved the first batch of Bitcoin ETFs on January 10, and they were listed on the stock market the next day. There are 11 ETFs in total, with a cumulative net inflow of $14.64 billion and a cumulative trading volume of more than $310 billion since their launch.
Bitcoin surged to new highs on increased institutional adoption and favorable regulatory developments.
After reaching a new high of $73,794 on March 14, Bitcoin fell to between $60,400 and $71,700 in wild volatility in the following months. Some of the factors driving this volatility include:
The United States has approved a spot Bitcoin ETF.
Runes, launched in April, is a decentralized protocol that creates fungible tokens directly on Bitcoin, enhancing Bitcoin’s functionality, scalability, and security while driving an increase in Bitcoin demand and transactions.
The April 19 Bitcoin halving event was expected to push Bitcoin to new highs, but market dynamics have delayed a sustained rally. Analysts say historical price surges usually occur 8-9 months after the halving.
Meanwhile, Ethereum ETH +2.65% also had its moment of glory this summer.
Ethereum’s performance in the first half of this year was boosted by two major events: the launch of the Dencun upgrade in March, which reduced transaction costs on Ethereum’s second-layer network, and the SEC ’s approval of eight spot Ethereum ETFs on May 23. Trading in the Ethereum ETFs could begin in the coming weeks.
2. Stablecoin market expansion
The stablecoin market continues to grow amid increased demand for safe-haven assets during market volatility.
Circle’s USDC market cap surpassed $60 billion, while Tether’s market cap also grew significantly, cementing its position as the leading stablecoin with over $80 billion in circulation.
3. Increased trading volume
Cryptocurrency trading volumes have surged as the price of bitcoin has risen, and while Binance remains the industry leader, the two most popular U.S. exchanges are also continuing to grow.
Coinbase reported record trading volumes in the first quarter, generating revenue of $1.6 billion, compared to $736 million in the same period in 2023. Trading revenue from institutional and individual clients increased to $1.08 billion.
Robinhood's cryptocurrency trading volume surged 224% year-over-year to $36 billion, far outpacing the 40% growth in the platform's stock trading volume. Trading-based revenue increased 59% year-over-year to $329 million, which Robinhood said was primarily driven by cryptocurrency revenue, which reached $126 million, up 232% year-over-year.
4. Memecoin once again ushered in a highlight moment
While Memecoin platform Pump.fun isn’t the highest-earning or most widely used protocol (it recently surpassed Ethereum in 24-hour revenue), it is arguably one of the defining releases of 2024 so far, as many crypto traders have once again become obsessed with speculating on tokens that generally admit to having no greater utility.
The appeal of some memecoins is clear: TRUMP and BODEN have sometimes outperformed the crypto market and may serve as alternative bets on which candidate will win the presidential election in November. The image that originally inspired the memecoin Dogwifhat sold as an NFT for $4.3 million, and its community took aim at the Sphere in Las Vegas. And the easy issuance of memecoins led to the creation of nearly 500,000 tokens in May alone.
Recently, celebrities have also started to jump on the bandwagon, although Ethereum founder Vitalik Buterin is not thrilled with so-called “celebrity coins” being launched by high-profile figures including Iggy Azalea, Caitlin Jenner, Hulk Hogan, and Wacka Flocka Flame. Whether Memecoin is truly the next Trojan Horse for cryptocurrency adoption remains to be seen.
5. Analyst predictions for Ethereum and Bitcoin
Looking ahead to the second half of the year, Geoffrey Kendrick, head of foreign exchange and digital asset research at Standard Chartered Bank, predicts that the price of Bitcoin will rise to $100,000 in time for the US presidential election in November . According to Kendrick’s prediction, “… Bitcoin could hit a new high in August and then reach $100,000 on US election day.”
However, Kendrick's forecast depends on Joe Biden staying in the U.S. presidential race - a scenario that the market believes favors a victory for Donald Trump.
Analysts at Standard Chartered Bank believe that Trump has a positive attitude towards Bitcoin, noting that there is a positive correlation between the former president’s election odds and Bitcoin prices.
“The logic is that both regulation and mining will be treated more favorably under Trump,” Kendrick said.
Kendrick expects that there will be more call options when Bitcoin options expire on August 30, and data from CF Benchmarks also shows that the implied volatility of Bitcoin options after August is higher.
“This suggests that traders are still looking for long-term Bitcoin price upside opportunities,” analysts at CF Benchmarks told The Block.
However, there is a divergence between the implied volatility indexes of Ethereum and Bitcoin, reflecting the market’s excitement over the possible launch of a U.S. spot Ethereum ETF in the coming months. Anticipation of the imminent start of spot Ethereum ETF trading has led investors to expect higher volatility in Ethereum than in Bitcoin.
Link to this article: https://www.hellobtc.com/kp/du/07/5282.html
Source: https://www.theblock.co/post/303417/bitcoin-hits-wall-street-a-recap-of-a-critical-six-months-for-crypto-markets-and-what-what-could-lie-ahead-the-rest-of-the-year
