After a difficult 2022, cryptos began a rebound in 2024. Bitcoin rose from $42,000 at the beginning of February to nearly $60,000 currently. Analysis of the explanatory factors of this rally.
The decisive impact of the Bitcoin ETF spot
The SEC’s mid-January approval of BlackRock’s Bitcoin ETF was a major milestone. The world’s largest asset manager was best placed to convince regulators.
Entries into these ETFs were massive from the launch, proof of the appetite of institutional investors to gain exposure to bitcoin via a traditional vehicle. In 38 days alone, they have accumulated the equivalent of 20 days of bitcoin issuance by miners.
With now more than 700,000 bitcoin in their reserves, ETFs reinforce the conviction of crypto investors that the available supply will quickly become scarce.
Anticipation of the halving
Another catalyst: the anticipation of halving planned for April 2024. This event that halves miner rewards has systematically preceded crypto rallies in the past.
Convinced that this pattern will repeat itself, many investors are betting on a post-halving surge. Even at $60,000, bitcoin seems undervalued to them compared to its future potential.
This anticipation creates a virtuous circle: the closer the halving approaches, the more crypto purchases accelerate. The probability of “sell the rumor, buy the news” seems low as sentiment remains bullish.
Crypto: sustained media interest
Despite the crypto winter of 2022, interest in crypto remains strong. Google searches are stable, Elon Musk fans are still watching his tweets.
A generation of new entrants is compensating for the departure of speculators in 2021. Driven by Web3, NFTs and metaverses, they see cryptos as much more than a speculative asset.
This lasting enthusiasm fuels the continued growth of the ecosystem. Even after a crash, the underlying trend remains positive with constant innovations.
Thanks to these multiple technical, economic and psychological factors, cryptocurrencies have regained their upward 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 there.
Driven by these multiple technical, economic and psychological factors, bitcoin has returned to higher price levels since the collapse of May 2022.
But at this stage, there is no guarantee that this rebound will last in the long term. As always with crypto, volatility is likely to remain there. Their future will depend on their actual adoption as a means of payment.
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