Binance trial

Binance is the largest cryptocurrency exchange, with a 52% share in the derivatives market. But its share in the spot market declined from 55% to 34% in 2023. This was due to American regulators who limited the American division's operation and sued the company and its CEO.

Image source: twitter.com/KaikoData

The key risk lies in the Department of Justice joining the SEC's lawsuit, bringing with it more serious charges. According to Bloomberg, the crypto exchange is accused of breaching securities law, tax evasion and helping regional players circumvent international sanctions. These accusations will result in global payment systems refusing to cooperate with Binance, and given its weight, it'll affect the crypto market negatively.

SEC vs altcoins

SEC Chairman Gary Gensler has repeatedly stated that he's prepared to recognise only Bitcoin as a commodity. Other coins, in his opinion, must be regulated by securities law. Under pressure from the SEC, some American crypto exchanges stopped providing staking services. That led to Ethereum lagging behind Bitcoin by 27% in 2023.

Image source: StormGain.com

The Coinbase crypto exchange strongly disagreed with the regulator's position, so it continued to provide staking services and is ready to defend doing so in its upcoming case. If it wins, Ethereum and some other major altcoins will get a powerful growth boost.

Spot Bitcoin ETFs

A real crypto hype and the onset of the new rally are expected with the emergence of the first spot Bitcoin ETFs in the US. The application deadline expires on 10 January 2024, with one of the applicants being BlackRock, the largest global investment company with $10 trillion in management.

Image source: bloomberg.com

According to Skybridge Capital, if ETFs are approved, the unmet high demand for Bitcoin from institutional investors will lead the price to skyrocket to $250,000 in the new bull cycle.

April 2024 halving

Speaking of the potential crypto hype, it's worth mentioning the upcoming halving of the block mining reward. In April 2024, it'll decline from 6.250 BTC to 3.125 BTC. Reducing issuance is a powerful deflationary factor that fosters the asset's price growth.

Image source: twitter.com/therationalroot

The circulating supply has been declining since 2020, and more and more coins are settling in cold wallets until better times. With the emergence of ETFs in the US and halving, a supply shock is inevitable. According to Ark Invest's optimistic forecast, Bitcoin will grow in price to $1.5 million by 2030.

The US Federal Reserve's monetary policy

Since the US is the world's largest economy, its financial policy affects the whole globe. Because inflation accelerated in 2022, the Fed started hiking its key interest rate, which resulted in a global outflow of funds from risky assets (including crypto) into US Treasury bonds.

net purchases of treasuries by foreign investors

However, more and more economists agree that the Fed will soon do a 180. Because the rate is high, interest expenses on servicing the national debt reached $1 trillion or 4% of GDP, and for the first time in 20 years, they exceeded defence spending. If the regulator lowers the key interest rate, it would support the crypto market's growth.

StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)