It’s been a big year for the crypto market, and we’re only halfway through 2024. Bitcoin BTC
-3.76%
's price significantly outpaced the S&P 500, surging over 46% in the first six months while the S&P 500 rose 15%.
Most importantly, the U.S. Securities and Exchange Commission approved spot Bitcoin exchange-traded funds – the first of their kind – significantly increasing institutional investment in cryptocurrencies. Meanwhile, Bitcoin experienced its fourth halving, which occurs after every 210,000 blocks are mined – or roughly every four years.
But as the second half of the year gets rolling, Mt Gox is again disrupting the market. Last month, the defunct bitcoin exchange announced it would begin distributing over $9 billion worth of funds to its creditors in early July. Those payments — to be made in bitcoin, bitcoin cash and fiat currency — began Friday, at one point causing bitcoin to plummet under the $55,000 level.
Despite near-term pain, some market makers and investors remain optimistic about bitcoin's prospects in the longer term. Here’s a brief timeline of the market’s major milestones in 2024 and a glimpse at what’s ahead in the crypto market before the year is up.
Bitcoin ETFs debut on Wall Street
The SEC approved the first Bitcoin ETFs on January 10, hitting the stock market the next day. There are a total of 11 ETFs, which have accumulated a total net inflow of $14.64 billion since their inception and a cumulative volume of over $310 billion.
Bitcoin enjoyed a significant price surge, reaching new all-time highs due to increased institutional adoption and favorable regulatory developments.
After reaching a new all-time high of $73,794 on March 14, bitcoin fell to between $60,400 and $71,700 amid significant volatility compared to previous months.
Some drivers of that volume:
The approval of spot Bitcoin ETFs in the U.S.
Launched in April, Runes, a decentralized protocol that enables the creation of fungible tokens directly on bitcoin, has enhanced its functionality, scalability, and security, while driving an increase in bitcoin demand and transactions.
The bitcoin halving on April 19 was anticipated to drive bitcoin to new record highs, however, market dynamics have delayed a sustained rally. Analysts state that historical price spikes often occur 8-9 months post-halving.
Meanwhile, Ethereum ETH
-6.25%
has had its own moment this summer.
Two major narratives drove ether in the first half of this year: the launch of the Dencun upgrade in March, which reduced transaction costs on Ethereum's Layer 2 networks, and the SEC’s approval of eight spot Ethereum exchange-traded funds on May 23. Trading of Ethereum ETFs could begin within the next few weeks.
Stablecoin Market Expansion
The stablecoin market continues its growth amid increased demand for safe havens during market volatility.
Circle's USDC market capitalization surpassed $60 billion while Tether's market cap also saw a substantial increase, reinforcing its position as the leading stablecoin with over $80 billion in circulation.
Increased Trading Volume
Cryptocurrency trading volumes surged as evidenced by the rise in bitcoin's price. While Binance remains the industry leader, two of the most popular U.S. trading platforms continued to grow.
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Coinbase reported record-breaking trading volumes in the first quarter, generating $1.6 billion in revenue compared to $736 million for the same period in 2023. Transaction revenue across both institutional and consumer clients increased to $1.08 billion.
Robinhood’s crypto trading volumes surged 224% year-over-year to $36 billion, far surpassing the platform’s rise in equity trading volumes (40%). Transaction-based revenues increased 59% year-over-year to $329 million, which Robinhood said was primarily driven by cryptocurrencies revenue of $126 million, up 232%.
Memecoins have another moment
It may not be the highest-grossing or most-used protocol (though it recently surpassed Ethereum in 24-hour revenue), but there's a case to be made that memecoin launchpad Pump.fun was among the defining new products of 2024 so far as many crypto traders once again became obsessed with speculating on coins which generally admit they serve no larger purpose.
The appeal of some memecoins is clear: TRUMP and BODEN have at times outperformed the crypto markets, likely as proxy bets on which candidate could win the presidential election in November. The original image that inspired memecoin Dogwifhat sold as an NFT for $4.3 million as its community set its sights on Las Vegas's Sphere. And the ease of launching memecoins led to nearly half a million coins being created in May alone.
More recently, celebrities have begun joining the fray, though Ethereum founder Vitalik Buterin isn't thrilled about the so-called "celebcoin" offerings from notable figures including Iggy Azalea, Caitlin Jenner, Hulk Hogan, and Wacka Flocka Flame. Whether or not memecoins are truly the next 'Trojan Horse" for crypto adoption remains to be seen.
Analyst forecasts for ether and bitcoin
Looking ahead to the second half of the year, Standard Chartered Bank's head of forex and digital assets research, Geoffrey Kendrick, sees the bitcoin price increasing to $100,000 by the time of the U.S. presidential election in November. According to Kendrick's forecast, "...a fresh all-time for bitcoin in August is likely, then $100,000 by U.S. election day."
However, Kendrick's prediction hinges on Joe Biden remaining in the U.S. presidential election race — a scenario the market perceives as favoring a Donald Trump victory.
The Standard Chartered analyst views Trump as "bitcoin-positive" and indicates a positive correlation between the former president's electoral odds and the price of bitcoin.
"The logic here is that both regulation and mining would be looked at more favorably under Trump," Kendrick said.
Kendrick expects more topside calls for the August 30 bitcoin options expiry, concuring with data from CF Benchmarks showing elevated implied volatility for longer-data bitcoin options for expiries after August.
"This suggests traders are continuing to look for longer-term bitcoin price exposure to the upside," CF Benchmarks analysts told The Block.
However, there is a discrepancy between the ether and bitcoin implied volatility indexes, reflecting excitement about the potential debut of spot ether ETFs in the U.S. in the months ahead. Anticipation around the commencement of spot ether ETF trading has investors positioning for higher volatility in ether than for bitcoin.
Zacks Abrams contributed to this report.
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