Bitcoin is waiting for the "good news"... and 4 reasons driving the potential rise
The cryptocurrency market, led by Bitcoin, is awaiting important events during the current year 2024 that may completely change many of the data related to it, especially with the US Securities and Exchange Commission (SEC) approving Bitcoin ETFs this week. According to what Reuters reported, citing informed sources, investment management companies, stock exchanges, and the US Securities and Exchange Commission discussed on Friday final wording changes regarding applications for spot Bitcoin exchange-traded funds, a step that could lead to the United States approving the funds for the first time this week. The current one. These steps join other factors that will support digital currencies in the new year, including the US Federal Reserve’s tendency to reduce interest rates while ending the monetary tightening policy, and other indicators. To what extent could this news constitute a breakthrough for Bitcoin and its companions? Can cryptocurrencies achieve broader momentum in 2024, through which they can regain their previous high levels?
During the month of April, the process of halving, or halving of Bitcoin, takes place, that is, reducing the reward for miners for Bitcoin, and this will result in a reduction in the supply rate. It is economically known that a reduction in supply is followed by a price payment for the financial asset. On the other hand, the halving of Bitcoin has historically represented a price driver for this important digital currency, and this will result in a positive price for trading Bitcoin and other digital currencies, as Bitcoin represents between 48 percent to 50 percent of the digital currency community, and thus a price boom will occur. This will have a positive impact on the rest of the digital currencies.
Reasons for growth: Senior financial markets analyst at Equity Group, Ahmed Azzam, said in statements to the “Eqtisad Sky News Arabia” website that there are 3 reasons that will be contributing factors to achieving price growth in cryptocurrencies during 2024, which are: The first reason... investment funds during the month of January. It is currently expected that the US Securities and Exchange Commission will approve instant investment funds for trading in digital currencies, and this matter, if it happens, will be a key player in the growth of this market. Due to the change in the tone of American legislators towards digital currencies on the one hand, and on the other hand the entry of American institutions as financiers of these assets, and this will necessarily be followed by an increase in the volume of demand for digital currencies. Many asset managers have applied for permission to launch Bitcoin traded funds since 2013, but the Securities and Exchange Commission rejected them, considering that the products would be vulnerable to market manipulation. Fourteen companies, including BlackRock, also filed for Bitcoin ETFs last year and are awaiting a decision from the Securities and Exchange Commission.
The third reason... interest reduction. Azzam points out that the major central banks will begin to reduce interest rates after mid-2024, as something that will affect cryptocurrencies, as lower interest rates always give a positive character to risky financial assets, giving an incentive to transfer money from assets. Safe investment into risky assets, and this is accompanied by high demand for digital currencies on the one hand and at the same time the shares of these currencies. The senior financial markets analyst at Equity Group believes that these three previous points will constitute a strong impetus for the remarkable growth of the digital currency market during 2024, even in light of geopolitical tensions, because these tensions always have a sharp impact on the financial markets at the beginning, and then with the passage of time they ease. This is so intense that it is ignored. A fourth major factor can be added to these factors, which is related to the repercussions of the geopolitical developments taking place in the world, their severe effects on the economic situation, and the state of uncertainty surrounding the global economic scene in general, which may be considered an incentive for some to turn to high-risk assets in the future. sometimes. Distinctive performance of Bitcoin. Bitcoin achieved outstanding performance last year, 2023, and jumped by about 150 percent. After Bitcoin started the year 2023 at the level of $16.6 thousand, at the end of the year it approached the level of $42 thousand. However, it is still far from the highest record level it recorded in November 2021 when it exceeded $68.7 thousand. The year 2023 was a somewhat confusing year for the cryptocurrency market, as it faced many challenges that varied between tightening regulatory restrictions on the part of regulatory bodies, and the exit of some platforms from major markets on the one hand. On the other hand, the momentum surrounding cryptocurrency funds constituted an impetus for the market to achieve relative heights.
