The year 2024 brought significant changes in macroeconomics and global politics that had a significant impact on the cryptocurrency market. Here are the most important events and their effects:
1. Monetary Policy and the World Economy
Easier Fed policy:
After an aggressive rate hike cycle in 2022-23, the Federal Reserve began stabilizing interest rates in 2024, with signs of a possible rate cut at the end of the year.
This had a positive impact on the cryptocurrency market, as digital assets are often perceived as risky investments that increase in value in an environment of looser monetary policy.
Inflation:
In developed countries, inflation has begun to decline, which has reduced pressure on consumers and increased their interest in investment assets, including cryptocurrencies.
In developing countries, high inflation continued to support the adoption of cryptocurrencies as an alternative to weakening local currencies (e.g. Türkiye, Argentina).
Global GDP:
The global economy has rebounded after a difficult few years, which has fueled increased investment in new technologies, including blockchain.
2. Geopolitics and cryptocurrencies
Regional conflicts:
Ongoing tensions in regions such as Eastern Europe and the Middle East have fueled increased interest in cryptocurrencies as a “safe haven.”
In some countries, cryptocurrencies have been used to circumvent economic sanctions or as a means of international value transfers.
Adoption in Asia:
Hong Kong and Singapore have established themselves as global cryptocurrency hubs, which has attracted investors and innovative projects.
China has partially softened its stance on cryptocurrencies, which has increased interest from Asian investors.
Digital Dollar (CBDC):
The introduction of central bank digital currencies (CBDC) by many countries (e.g. Europe, China) has increased discussions about decentralization and the value of private cryptocurrencies such as Bitcoin.
3. Financial crises and cryptocurrencies
Banks and trust in fiat:
The failures of several smaller regional banks in the US in early 2024 have brought renewed attention to Bitcoin as “digital gold” and a store of value.
The growing uncertainty surrounding traditional financial institutions strengthened the arguments in favor of a decentralized financial system.
Currency crises:
In some countries, such as Argentina and Pakistan, the sharp weakening of the national currency has increased the adoption of stablecoins (e.g. USDT) as an alternative means of payment.
4. Green transformation and ESG
Sustainability in cryptocurrencies:
The growing pressure on blockchain projects to operate in accordance with ESG (Environmental, Social, and Governance) principles has led institutional investors to favor cryptocurrencies with a lower carbon footprint (e.g. Ethereum after switching to Proof-of-Stake).
Renewable energy:
Mining projects that used green energy gained greater support from both governments and private investors.
5. Technological and global trends
AI and blockchain adoption:
The rise in popularity of artificial intelligence has fueled interest in projects that combine AI with blockchain, such as Fetch.ai and SingularityNET.
Blockchain has gained importance in applications such as logistics, health, and real-world asset tokenization.
Metaverse i Web3:
Although interest in the Metaverse declined in 2023, it returned in 2024 due to improving technology and new use cases, such as education and business.
Macroeconomics in 2024 created favorable conditions for the cryptocurrency market:
Monetary policy supported the growth of digital assets.
Global events such as conflicts and currency crises have increased demand for cryptocurrencies.
Technological adoption and regulation brought greater stability to the market.
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