Bitcoin is having the time of its life in 2024, as it launched into growth from the very beginning. February was one of the most consistent growth months for the king of crypto, and March 5th saw the coin exceeding its previous all-time high levels from 2021. This is important news, considering that investors weren’t anticipating this growth ahead of the next halving. Binance data shows that the price growth remains consistent and unaffected by the previous massive corrections. It seems now that investors must continue to consolidate their portfolios if they want to avoid losses, as the market is expected to continue to change even more drastically in the upcoming months.
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ETFs
The exchange-traded funds were arguably some of the most widely anticipated crypto products in recent years. Investors have been waiting for them for more than a decade, but they have become genuinely noteworthy over the past few years. After several refusals and delays, the Securities and Exchange Commission finally approved them on January 10th. Just a day earlier, a fake message was posted from the agency’s Twitter account, which declared that the assets had been officially approved. The SEC was quick to dismiss the rumors but then announced the integration of Bitcoin-backed ETFs just a day later.
After the price of Bitcoin climbed as a result of the ETFs, many analysts expect that an even bigger wave awaits the exchange-traded funds marketplace. As institutional engagement rates continue to rise and retailers become aware of the advantages of this asset class, the tides will turn for ETFs. The changes are expected over the next few months as institutional capital continues pouring in. Investment managers and financial services providers such as Wells Fargo and Merrill Lynch have started providing ETFs to clients.
Considering the sheer number of customers that use the services of these companies, it’s unquestionable that the number of users will grow as well. American multinational investment bank Morgan Stanley is reportedly thinking of starting a brokerage platform based on ETFs.
Supply and demand
The price fluctuations present in the cryptocurrency environment are the result of a combination of factors, including macroeconomics and world news. Bitcoin’s fundamental design, which dictates a fixed supply of 21 million coins that will ever be minted, is also responsible for the price variations. Right now, analysts believe that the introduction of exchange-traded funds might have ushered in a new era of prices and their movements.
This isn’t at all surprising, considering that the ETFs are entirely new products that have never been part of the cryptocurrency market before. Everything new in this vulnerable space that is prone to considerable price movements will not go unnoticed. At the moment, the supply-demand dynamic appears to be entirely different from what the community is generally accustomed to. The main issue seems to be the fact that there’s too much demand for the existing supply.
The introduction of a new wave of institutional interest will push Bitcoin’s price higher as well, and the differences could be substantial. The initial predictions were for growth that reaches the $80,000 level, but following the February rally, some believe that the levels could go even higher and climb to $100,000 or even $200,000, according to the more optimistic, bullish estimates.
NFTs
The NFTs took the backseat in favor of the Ordinals, but it seems now that the asset class is moving back into the lens of the crypto community. Some have predicted that the non-fungible token volume will grow as well in the aftermath of the halving. This belief is not without any basis but is actually rooted in historical data. In the past, anytime Bitcoin grew, the NFT ecosystem would grow as well. The reason for that is quite simple: the tokens are part of the environment, and the interest in digital assets spills toward the altcoins as well.
NFTs are mainly involved in these price movements as they are integrated and fundamentally different from PFP projects. The Ordinals will be directly impacted as well. Unlike NFTs, which are built of varying blockchain layers, the Ordinals are part of the mainframe. The holders that haven’t used their coins in a long time might feel the need to participate in the system this year. The trend will be particularly beneficial for those who have considerable amounts of disposable income in Bitcoin to spend. As the price increases and the price goes above $70k, all users will be in the green. That means that gains are ahead, and many people will try to make the best of that opportunity.
As the mining rewards lose volume, developers will also start looking towards Ordinals to generate higher profits. At the moment, Ordinals generate more than $200 million in transaction fees for the miners who interact with them. In the aftermath of the halving, their influence will grow, which will greatly influence the revenue and fees miners interact with.
Adoption rates
The primary purpose of ETF adoption was to boost adoption rates and get more investors to engage with the cryptocurrency markets. This is particularly the case for whale investors, especially the ones based in corporations and institutions. Many of them want to engage with the marketplace but are concerned about the steep volatility rates and the potential of losing significant portions of capital. The ETF market allows them to engage and perform their transactions without additional risks.
According to some predictions, the halving could essentially act as free marketing for the entire sector and get more investors to diversify their portfolios with the help of cryptocurrencies. It is also quite possible that the interest will expand beyond simply purchasing cryptocurrencies on exchanges. Companies and institutions might want to find, develop or invest in Web3 solutions that can upgrade their systems and solve any lingering issues they might have.
Some might choose to become involved in decentralized finance, collect non-fungible tokens or develop their own. New collectibles will likely emerge as well, and Bitcoin will be intertwined with the NFT market. With Bitcoin in the public eye, things will surely change for the larger market as well.
The crypto environment will continue to change and develop into 2024. Most researchers expect the following months to be intense and marked by considerable growth.
