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Cryptos are exploding at the beginning of 2024! Why?

Wed 28 Feb 2024 ▪ 3 min of reading ▪ by Eddy S.
Getting informed Crypto regulation

Following a challenging year in 2022, cryptocurrencies have started on a rebound in 2024. Bitcoin has risen from $42,000 at the beginning of February to nearly $60,000 at present. Analysis of the factors explaining this rally.

Crypto Bitcoin

The Decisive Impact of the Spot Bitcoin ETF

The mid-January approval by the SEC of the BlackRock Bitcoin ETF was a major milestone. The world’s largest asset manager was best positioned to convince the regulators.

The inflows into these ETFs were massive from the start, proving the institutional appetite to gain exposure to bitcoin through a traditional vehicle. Within just 38 days, they had accumulated the equivalent of 20 days of bitcoin issuance by miners.

Now with more than 700,000 bitcoins in their reserves, ETFs reinforce the conviction of crypto investors that the available supply will become scarce quickly.

Anticipation of the Halving

Another catalyst: the anticipation of the halving scheduled for April 2024. This event, which halves the miners’ rewards, has consistently preceded crypto rallies in the past.

Convinced that this pattern will repeat, many investors are betting on a post-halving surge. Even at $60,000, bitcoin seems undervalued compared to its future potential.

This anticipation creates a virtuous circle: the closer the halving approaches, the more crypto purchases accelerate. The likelihood of a “sell the rumor, buy the news” scenario seems low as sentiment remains bullish.

Crypto: Sustained Media Interest

Despite the crypto winter of 2022, interest in crypto remains sharp. Google searches are stable, and Elon Musk’s fans still watch for his tweets.

A generation of new entrants is offsetting the departure of the speculators from 2021. Driven by Web3, NFTs, and the metaverse, they see in cryptocurrencies much more than a speculative asset.

This enduring enthusiasm fuels the continuous growth of the ecosystem. Even after a crash, the fundamental trend remains positive with constant innovations.

Thanks to these multiple technical, economic, and psychological factors, cryptocurrencies have regained their bullish momentum. But at this stage, there is no guarantee that this rebound will last in the long term. As always, volatility is likely to remain a factor.

Driven by these various technical, economic, and psychological factors, bitcoin has regained higher price levels since the collapse of May 2022.

But at this stage, nothing guarantees that this rebound will last over the long term. As always with crypto, volatility is likely to remain a factor. Their future will depend on their actual adoption as a means of payment.

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Eddy S. avatar
Eddy S.

Le monde évolue et l'adaptation est la meilleure arme pour survivre dans cet univers ondoyant. Community manager crypto à la base, je m'intéresse à tout ce qui touche de près ou de loin à la blockchain et ses dérivés. Dans l'optique de partager mon expérience et de faire connaître un domaine qui me passionne, rien de mieux que de rédiger des articles informatifs et décontractés à la fois.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.