The growth of the crypto market is the result of many interconnected factors, from economic events to technological innovations. Here are the key points that explain the current and future price jumps in cryptocurrencies:
1. Bitcoin halving 📉
The halving that occurred in April 2024 reduced the mining reward for BTC by half. This decreases the supply of coins and traditionally leads to price increases when demand remains stable or grows. Experts estimate that the halving effect will manifest more strongly by the end of 2024, which could push Bitcoin to new highs.
2. Approval of Bitcoin ETF 📊
The launch of a Bitcoin ETF in the USA at the beginning of 2024 opened up the crypto market for large institutional investors. This event became a catalyst for price growth, however, further influx of funds is expected in the long term when the instrument becomes more popular among investors.
3. Macroeconomic factors and elections in the USA 🗳️
The reduction of interest rates by the Federal Reserve of the USA contributes to an increase in interest in risk assets, including cryptocurrencies. Simultaneously, the presidential elections in the USA in November 2024 may become an additional trigger for growth due to discussions of digital assets in the political arena.
4. Development of DeFi and new technologies 🔗
Technological progress in decentralized finance (DeFi) and the emergence of new instruments, such as Liquid Staked Derivatives (LSD), expand earning opportunities and market liquidity. This attracts new participants and increases the capitalization of the crypto sector.
5. Seasonality and investor behavior 📅
Historically, the fourth quarter of the year is favorable for the crypto market, due to the seasonal increase in investor activity and additional capital inflow.
Important takeaways for traders and investors 💡
1. Monitor the halving and its consequences: Buying Bitcoin and altcoins before the full impact of the halving may be a profitable strategy.
2. Pay attention to macro data: Actions by the Federal Reserve and elections in the USA directly impact the market.
3. Technologies and ETFs: The use of new financial instruments, such as ETFs and LSDs, opens new opportunities for long-term growth.
4. Diversification: Invest not only in BTC and ETH but also in promising DeFi projects and altcoins.
Thus, the growth of cryptocurrency is not just speculation, but the result of a combination of fundamental factors, technological breakthroughs, and the macroeconomic situation. For investors, the key is to monitor trends and manage their assets wisely.