Bitcoin’s rise in late 2023, reaching its highest yearly prices, was fueled by market optimism.
This optimism centered around the potential approval of spot-price ETFs in the United States.
However, 2024 may see Bitcoin’s value increase without relying on these ETFs. Markus Tielen, head of research at Matrixport, shared his insights in a recent report.
He believes Bitcoin will benefit from a more favorable macroeconomic climate in 2024.
This situation, coupled with an important update in Bitcoin’s protocol, is expected to drive its price higher than in 2023.
Tielen underscores the significance of understanding the macroeconomic environment for predicting market evolution.
He notes that cryptocurrencies, like Bitcoin, tend to struggle in low liquidity environments. However, they thrive when there’s a shift in liquidity expectations.
This dynamic was the key driver behind Bitcoin’s performance for most of 2023.
The Federal Reserve’s recent indication of an end to interest rate hikes and potential rate cuts in 2024 adds to this favorable outlook.
Tielen draws parallels to 2019 when the end of a Fed rate hike cycle led to a near 300% increase in Bitcoin’s price.
Although the Fed projects three cuts in 2024, a discrepancy remains between inflation rates and interest rates.
Bitcoin’s market dominance
Additionally, 2024 will witness another Bitcoin halving event. Historically, Bitcoin’s price has seen substantial increases following such events.
Tielen projects this trend will continue, offering room for further price appreciation.
Tielen concludes that even without the SEC’s approval of Bitcoin ETFs in early 2024, higher cryptocurrency prices are likely.
He advises investors to watch Bitcoin’s market dominance, as a decline might signal a rise in alternative cryptocurrencies.
In summary, Tielen’s report suggests that Bitcoin’s growth in 2024 could be independent of ETF approvals.
It highlights the importance of macroeconomic factors and intrinsic protocol updates in shaping Bitcoin’s market value.
Exploring detailed financial and cryptocurrency reports would be beneficial for more comprehensive insights into Bitcoin’s future prospects and the interplay of various factors.