Cryptocurrencies have been going through some difficult times over the past couple of years, but it seems that 2024 is the year when that finally changes. 2022 was challenging through and through, with the prices dropping considerably and investors unsure of how they should proceed going forward. Although 2023 started off on a much more promising note, it ended up being a rather lackluster year, with the performance levels far below what most investors were expecting.

Major cryptocurrencies remained sideways throughout the year, but many believe things are starting to improve now. The last quarter of 2023 came with a minor shift in the price points, swinging back towards growth. According to Binance, 2024 is the year when the ecosystem finally manages to escape the yoke of the bear market.

Constant growth

Just because growth wasn’t as substantial as investors were expecting in 2023, that doesn’t mean that the markets collapsed. Investors were more optimistic, as historical data shows that after a prolonged period of losses, growth is imminent and inevitable. This is good news for the current year as well, as the prices will grow based on the previous movements. The inflation levels have dropped compared to their levels during the same time last year, and most analysts believe that the central bank rate hikes that plagued the investing environment during the last year are now a thing of the past.

This is important because macroeconomics and their changes and shifts have always affected crypto markets as well. This influence is expected to continue this year as well.

Halving

On January 10th, the crypto world was rocked by the release of the first Bitcoin-based spot ETF. The launch of this asset class was over a decade in the making, and it took numerous postponements to get here. Investors were expecting a massive price rise as a result of the ETFs, which are set to bring cryptocurrencies into the mainstream and increase their appeal among retail and institutional investors. Since many want to participate in the market but are put off by the volatility and potential risks of dealing with cryptocurrencies, ETFs provide the ideal solution. Additionally, technologies like ethereum rpc have also contributed to the decentralized nature and enhanced accessibility of the Ethereum blockchain.

The next step is the halving, which will take place sometime around April. It will reduce the rewards miners receive for finishing a block to half of the previous amount. This increases scarcity and is one of the leading causes behind Bitcoin’s enduring dominion over the crypto market. However, the halving won’t just impact BTC itself but the entire crypto market. That’s because, as the coin with the highest market cap, Bitcoin’s movements affect the whole ecosystem.

So, growth will most likely start to appear right away and for all coins and tokens. However, it will take anywhere between six to twelve months before the price growth reaches its full potential, similar to how the 2020 halving ushered in the all-time highs of 2021.

Black Swan

In the crypto and financial world, a Black Swan event refers to an unpredictable and unexpected event that will have a significant impact and considerable consequences over the long term. Anytime predictions are offered for the crypto market over the course of a certain time period, these occurrences should be considered as well. But since they come out of the blue, they cannot be regarded as part of the overarching strategy and plan. What investors can do is make room for the unexpected in their trading methods and make sure that they can be changed on short notice.

Since the cryptocurrency space changes all the time, and fluctuations are nothing new for users, many don’t ever become too optimistic and comfortable. That’s precisely when the most significant changes can occur and throw the whole thing off the loop.

Q4

In 2023, prices were slowly recovering until the summer, when they suddenly dropped considerably in a matter of days. However, starting in October, the coins began regaining some of their previous strength. The fourth quarter, therefore, proved to be quite beneficial for the market and will continue to give the coins a boost this year. Some of the analyst predictions for this year follow a similar line, with the possibility being that the same timeframe will also be beneficial for the crypto world this year.

If this is true, investors still have several months to go before escaping the uncertain situation and price stagnation. It’s no easy thing, and it’s crucial that trading strategies are adjusted to meet the demands accordingly. In the meantime, volatility shouldn’t be as considerable of an issue as it used to be in the past, but investors should still be aware of it in order to avoid disappointments.

Maturing

The crypto market is still relatively new when compared to its more traditional peers: stocks, real estate, bonds or precious metals. However, the events of the past few months show that the environment is finally maturing. This calls for changes from investors as well. Their strategies should mature as well and become more comprehensive. Some have interpreted the recent calls for regulations from lawmakers as a way to impose restrictions on the marketplace and instate censorship.

Others have adopted a different view. According to their beliefs, the fact that legislators show interest in cryptocurrencies is a clear indicator that the world of digital finance is ready to stand side by side with the rest of the financial environment.

Bearish tendencies

While the ETFs were much-anticipated, they haven’t elicited the response investors were expecting. Growth wasn’t as considerable, and while the altcoins, including Ethereum, saw moderate growth right away, Bitcoin actually dropped a little in the aftermath. Since then, growth has been tied more often to whale investments and institutional involvement rather than the effect of exchange-traded funds. Analysts believe that ETFs will have a more bearish run this year but that there’s still potential for a long-term rally.

Some exchanges can go through similar difficulties this year, with their markets shrinking after the boost given by the collapses of crypto platforms in 2022.

While predictions are a staple of the crypto environment and will continue to remain so, it’s important to remember that things can always change. The investors who are focused on gains and revenue must also create study strategies.