Author: Nancy, PANews

After surviving the "five poverty and six extremes", the cryptocurrency market did not usher in a turnaround in July as expected. On the contrary, negative events such as the German government's sell-off and the repayment of Mt. Gox are making investors panic, and Bitcoin The decline caused the cryptocurrency market to plummet across the board.

At a time when investor confidence has been hit hard, the cryptocurrency market is believed to be turning around starting in the fourth quarter of 2024 due to the superposition of multiple positive factors such as the $16 billion FTX repayment plan, rising expectations for interest rate cuts, and the results of the U.S. election.

$16 billion FTX repayment plan could push market to new highs

According to the revised reorganization plan and disclosure statement submitted by FTX to the U.S. Bankruptcy Court of Delaware in May this year, it expects that the total value of the property collected, converted into cash and available for distribution will be between US$14.5 billion and US$16.3 billion. More than the $11 billion FTX owes customers and other non-governmental creditors during the period, the excess cash will be used to pay interest on the company's more than 2 million customers.

If the plan is approved by the bankruptcy court, the Debtors expect that 98% of FTX's creditors will receive approximately 118% of the amount of their allowed claims within 60 days of the plan's effectiveness. However, due to different opinions among FTX creditors, there is currently no consensus on how to settle claims.

Currently, FTX has received court approval for creditors to vote on initiating a compensation plan with cryptocurrency payments in cash or in kind. Creditors have until Aug. 16 to vote, and Judge Dorsey will decide whether to approve the plan on Oct. 7, according to court documents. Once the court approves the reorganization plan, FTX will repay creditors within two months. According to the timetable, FTX’s repayment time is expected to be approximately from the fourth quarter of 2024 to the first quarter of 2025.

Although the final compensation method has not yet been determined, crypto analyst Ash Crypto believes that given that most FTX customers are cryptocurrency enthusiasts, a huge amount of $16 billion will enter the crypto market and become the biggest catalyst for price increases, and Bitcoin is expected to break through At US$120,000, Ethereum will exceed US$12,000, and other alternative coins will increase by more than 10 times to 50 times.

Expectations for an interest rate cut within the year have increased, with the probability of a rate cut in September exceeding 70%

The rate hikes and cuts by the Federal Reserve are one of the important factors affecting the price of Bitcoin, and interest rate cuts tend to drive market strength.

Not long ago, Federal Reserve Chairman Jerome Powell said that inflationary pressure in the United States has eased recently, but the Federal Reserve still needs more data to prove that the risk of inflation has passed before deciding to cut interest rates. If interest rates are cut too early, inflation may rise again; if interest rates are cut too late, it may slow economic growth and trigger a recession.

Although Ball said that the timing of interest rate cuts has not yet been determined, the latest data released by the United States shows that the U.S. economic growth is slowing down. For example, the U.S. non-farm employment data in June was revised sharply, and the unemployment rate climbed to 4.1%, the highest level in 2021. The highest level since November this year, and market expectations for interest rate cuts have also increased.

For example, analysts at Citi Research expect the Fed to cut interest rates by 25 basis points at each meeting starting in September, for a total of eight cuts through July 2025. This would reduce the base rate by 200 basis points, from 5.25%-5.5% now to 3.25%-3.5%, and leave it unchanged for the remainder of 2025.

QCP Capital also said in its latest market analysis that U.S. employment data showed downward revisions for both April and May, confirming Ball's deflationary path and the possibility of early interest rate cuts in September and December. The chances of a monthly interest rate cut increase. In addition, at the latest Federal Reserve interest rate meeting, 7 out of 19 officials expected the Fed to cut interest rates once this year, and 8 supported two interest rate cuts.

According to the CME Group's FedWatch Tool, as of July 9, the market expects the probability that the Federal Reserve will cut interest rates at its September interest rate meeting has increased to 73.6%, and the probability of keeping unchanged is 22.9%.

First U.S. cryptocurrency accounting system to take effect in 2025

In December last year, the US Financial Accounting Standards Board (FASB) announced the first version of cryptocurrency accounting rules. Companies holding Bitcoin or Ethereum must record their currency value according to fair value, and changes will be reflected in net income. The new rules will take effect for fiscal years beginning after December 15, 2024, and will apply to both listed and unlisted companies in 2025.

For crypto-assets, changes in accounting standards mean companies including MicroStrategy, Tesla and Block will be able to record highs and lows in the value of their cryptocurrency holdings. Under the new rules, companies that hold cryptocurrencies such as Bitcoin or Ethereum will be required to record those tokens at fair value, which is the latest market value, and changes in fair value will be included directly in net income.

In this regard, MicroStrategy founder Michael Saylor wrote that this move will promote the adoption of Bitcoin as a treasury reserve asset by global companies; former PayPal President David Marcus also believes that the new regulations will eliminate the need for companies to include Bitcoin on their balance sheets. A major obstacle that became an important milestone for Bitcoin.

Trump’s chances of winning the election increase, and cryptocurrency becomes a new bargaining chip in the election

2024 is an election year, and the competition in the United States has attracted the most attention from the world. The U.S. presidential election will also be held on November 5. In this election, cryptocurrency has become an important issue. Not only has Trump shown a positive attitude towards cryptocurrency, and even stated that he would become a "crypto president", the Biden administration has also followed suit and sent friendly signals. The direction of American political trends has changed. The shift has had a positive impact on the development of the crypto market.

Currently, Biden's "retirement theory" continues to ferment, including several Democratic members of the U.S. House of Representatives calling on Biden to withdraw from the presidential election. Senator Warner is also leading the push for Biden to withdraw from the race. Although Biden publicly refused to withdraw from the race, Trump's victory rate improved significantly after the first TV debate in the United States. In the second quarter of fundraising, Trump raised $331 million, surpassing the $264 million raised by Biden and the Democratic National Committee. .

Trump’s victory is believed to bring new upward momentum to the crypto market. Standard Chartered Bank said that August 4 is a key date for Biden's decision. If he withdraws from the campaign, it will bring about policies that are more beneficial to the cryptocurrency market, or push Bitcoin to a new high, and predicts that it will reach $200,000 in 2025.

In addition, the US Republican National Committee stated in its official platform for the 2024 US election that it will support a number of policy measures that will benefit crypto companies and holders. An official document released by the Trump campaign team in recent days stated that the Republican Party's "Make America Great Again" platform vows to end the "illegal and un-American crackdown" on the U.S. encryption industry, and promises to "defend Bitcoin mining" and allow cryptocurrency Holders keep their tokens to themselves and are also opposed to the creation of a central bank digital currency (CBDC). "We will defend the right to trade free from government surveillance and control," the document reads.

(The above content is excerpted and reprinted with the authorization of our partner PANews, original text link)

Statement: The article only represents the author's personal views and opinions, and does not represent the objective views and positions of the blockchain. All contents and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and transactions, and the author and Blockchain Client will not be held responsible for any direct or indirect losses caused by investors' transactions.

〈Is there no hope for a “turnaround” in July? These major benefits will promote the reversal of the cryptocurrency market> This article was first published on "Blocker".