What aspects of the Cryptocurrency market should we follow in the second half of 2024?

Author: KYLE TORPEY

Compilation: Plain Talk on Blockchain

Key Points

Crypto Assets bulls believe that BTC may still have rise potential, as the demand for Spot BTC ETF and the Halving effect may not have been fully reflected yet.

The clarity of regulation remains a key obstacle, and investors are closely following the candidate's statements and recent developments for clues.

BTC has risen more than 30% this year, and the demand for ETFs holding this leading Cryptocurrency has helped push its price up. However, the price of BTC has recently cooled down, falling from the historical high point earlier this year.

This trend continued in the past few days, with BTC falling below $57,000 in trading, while it had surpassed $73,000 in March. So, what is the outlook for the remaining time in 2024? Bullish investors suggest that further demand for trading funds focused on cryptocurrency on the trading platform may push up prices. But there are also other underlying issues.

1. The demand for Bitcoin and Ethereum ETFs may boost Cryptocurrency

The demand for trading funds on the SpotBTC (BTC) trading platform, which has been trading since January, supports this Cryptocurrency this year. Bulls believe that this effect has not been fully reflected yet.

According to Farside Investors, the net inflows into these new ETFs have exceeded $14.4 billion. Currently, most of the funds flowing into BTC ETFs come from self-directed investors. Market observers believe that with the decrease in financial advisors' concerns about recommending encryption products, further demand may come in, thereby boosting BTC itself.

"We haven't seen many institutions, such as pension or endowment funds, participate in these ETFs," Bloomberg Intelligence analyst James Seyffart said. "To me, this means the potential area where demand rise does exist."

Investors generally expect an ETF based on Ethereum (ETH) to be listed this year: The Securities and Exchange Commission is expected to approve individual ETF applications before the end of the summer. This may increase demand for Cryptocurrency.

Bitwise CIO Matt Hougan estimates that the inflow of ETH ETFs in the first 18 months will reach $15 billion. At the same time, Seyffart expects them to attract 20% to 25% of the inflow of BTC funds in the first few months.

"We do not believe that ETH ETF will cause as much of a stir as BTC ETF did, as BTC ETF broke many different records in terms of fund inflows, assets, and volume," Seyffart told Investopedia.

2. Elections and other issues worthy of follow

This year, other topics worth following in the Cryptocurrency field include:

1) Presidential Election

Donald Trump's support for Cryptocurrency during his presidency has been more explicit than ever. President Joe Biden's administration is considered to support stricter regulation, although some industry observers interpret the recent decision not to sue ETH 2.0 as a sign of evolving views.

"I think the probability of 'clarity' before the election is 0%, and if there is a legislative framework, it will be at the earliest next year," said Sarah Brennan, General Counsel at Delphi Ventures.

2) The aftermath of BTC Halving

According to the analysis company CCData, BTCHalving - that is, the Halving of the number of new BTC generated every approximately 10 minutes - has a positive impact on its price in history, which lasts for a period ranging from 370 days to 550 days.

The last Halving occurred about six months ago, but unlike previous occasions, BTC had already experienced a significant pump before this. Analysts from Deutsche Bank and JPMorgan said that the expected price pump had mostly been reflected in the latest Halving.

Although recent volatility may support this theory, BTC bulls believe that this downward trend is temporary.

"It's normal for such a price drop to occur after Halving - Halving is very bullish, but Bull Market usually starts a few months later, which is determined by fundamentals," said Caitlin Long, founder and CEO of CustodiaBank, in a post on X platform at the end of June.

3）Mt. Gox Distribution

This week, the collapsed BTC trading platform Mt. Gox began distributing tens of billions of dollars of BTC to former customers. This increased supply has entered the market since Friday, and its ultimate impact is still uncertain, with some seeing it as bearish and others feeling that the issue has been exaggerated.