Although the decline in cryptocurrency markets deepens, investors are hopeful for the rest of the year.
The cryptocurrency market has had a very active period since the beginning of the year, and investors expect some prominent developments to positively affect the course of the markets.
4 developments
According to the news by Frances Yue from MarketWatch, activity continues in the cryptocurrency markets, which have corrected after a long-term rally. Bitcoin hit an all-time high of $73,798 in March and has fallen more than 20 percent since then, according to Dow Jones Market Data. Bitcoin is currently trading at $58 thousand.
In January, the first spot Bitcoin exchange-traded funds in the US began trading, and in May US regulators took a major step towards approving Ether ETFs. In April, the Bitcoin network held its fourth 'halving' event, and the reward miners received for successfully completing a block dropped to 3,125 Bitcoins, from 6.25 Bitcoins previously.
According to Dow Jones Market Data, in the first half of the year, Bitcoin increased by approximately 46 percent and Ethereum by 50 percent. These gains lag the performance of the first half of 2023, when Bitcoin rose 83.6 percent and Ethereum rose 60.7 percent.
In the rest of this year, it is necessary to closely monitor 4 developments regarding what to pay attention to in crypto.
Interest rate cuts
The macroeconomic environment is likely to continue to play a significant role in crypto prices in the second half of the year. ETC Group Head of Research André Dragosch states that concerns about the global slowdown will likely weigh on Bitcoin, but potential interest rate cuts by central banks will have a positive impact on digital assets.
“In the past, we have seen that periods of increased money supply growth are associated with Bitcoin bull markets, while periods of decreasing money supply growth are associated with bear markets,” Dragosch says.
Analysts at CCData also echo this point. “Without interest rate cuts, economic growth will remain slow and foreign investment in speculative markets will be limited,” analysts wrote in a recent report.
Investors are currently pricing in two rate cuts by the Fed by the end of this year, with the first expected to occur in September, according to data from the CME FedWatch Tool. However, according to policymakers' 'dot plot' forecast published in June, Fed officials foresee only one interest rate cut by the end of the year.
Mt. Gox refund
Crypto investors Mt. It will monitor the amount of Bitcoin sold by Gox's creditors.
Investors Mt. While we worry that Gox's creditors may choose to sell the Bitcoins they received, this has to do with the fact that Bitcoin is now trading at a much higher price than it was a dozen years ago.
Founded in 2010, Mt. Gox was one of the oldest crypto exchanges and was once the largest digital asset exchange in the world. More than 600,000 Bitcoins were stolen in the attack in 2011 and the platform went bankrupt in 2014. Last year, the Department of Justice accused two Russian citizens of Mt. He accused Gox of conspiring to launder Bitcoins by hacking. The exchange announced in September last year that it was facing an October 31, 2024 deadline for basic repayments, early lump sum repayments and interim repayments.
Some Mt. Gox investors stated that they had already received some cash payments for stolen assets earlier this year, but that refunds in Bitcoin and Bitcoin Cash would begin this month. According to data from Arkham Intelligence, as of Wednesday, there were 141,687 Bitcoins worth approximately $8.5 billion on the exchange.
Still, the impact of the actual sell-off may not be as significant as the market expects, according to NYDIG Global Head of Research Greg Cipolaro. NYDIG expects approximately $1.5 billion worth of Bitcoin to enter the market once the redemption occurs.
“Although a significant amount, given daily trading volume ranging from $1 to $1.5 billion for Bitcoin quoted in USD and $4 billion for Bitcoin quoted in USDT, this is likely to have a significant impact on the price of Bitcoin,” Cipolaro says in the note. “It may not have a big impact.”
US presidential election
Crypto investors will be closely watching the results of the US presidential elections in November and how the elected administration will shape its policy regarding digital assets.
It looks like crypto has become an increasingly important theme during this election cycle. Presumptive Republican presidential nominee Donald Trump has shifted gears on his stance on crypto; Although the former president has downplayed the entity in the past, he is now embracing the industry.
While the Trump campaign began accepting donations in cryptocurrency in May, Trump reportedly met with executives of crypto mining companies and introduced himself as the 'cryptocurrency chairman'.
Meanwhile, in May, most House Democrats voted to approve an industry-backed regulatory bill; The move was perceived as a signal of how Democratic lawmakers do not want the voting public to view their party as anti-crypto.
Crypto ETFs
The SEC may reportedly approve the first spot Ethereum exchange-traded funds in mid-July, according to various media outlets.
In May, the SEC approved applications from the New York Stock Exchange, Nasdaq and a Cboe subsidiary exchange seeking rule changes that would allow them to list spot Ether ETFs. However, the agency has not yet approved registration statements from potential issuers.
While there is consensus that Ether ETFs are unlikely to be in as much demand as Bitcoin ETFs, analysts expect the arrival of such products to significantly increase the price of Ethereum and bring more demand to the crypto space in general.
Investors will also continue to monitor the investment flows of Bitcoin ETFs. “Even though Bitcoin ETFs are available in the US, that doesn't mean that people, especially registered investment advisors or their clients, are exposed to the risk that they might get right now,” says Thomas Perfumo, head of strategy at Kraken.
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