I know you guys are not the most financially literate... But I'm feeling generous today and I'll take the time to write an actual analysis of the situation, or at the very least, some food for thought. ✍️
So... Everybody is waiting for the halving thinking it'll be the start of the bullrun they've been waiting for years, excitation is building, hope is high... And reasoning is low.😅
1) Halving :
The halving itself will have pretty much 0 impact at this point, the amount of BTC left to be mined is already low enough at this stage with over 93% of all Bitcoin being in circulation (not accounting for lost keys etc)... So the decrease in "new supply" will barely be relevent in itself, it's more of a celebration date than an event with a meaningful economical impact.
2) Wait no bullrun then?
Well yes there will be one, of course there will be one... The economy is cyclical, which in simpler terms mean that after every "down time" there's always an "up time" ... But the question is when?
All the increase the crypto area has witnessed during the 2024 first quarter has been fueled by two things :
New players coming on the market with big pockets, in other words, institutional investors with ETFs.
The expectations of multiple rate cuts from central banks (aka quantitative easing, or money printing).
While the first point is still valid and will (should) increase over time, with more and more ETFs being created, and more funds coming onto the market as a result... The second point is far from being certain at this point.
The extremely large amount of money that have been printed during the pandemic has generated an inflation that is far from being solved today, and the central banks can not resume "printing money" while the inflation is still rampant (or else it would worsen it)... So, we should see more tightening for at least the next 6 months (monetary policies) and that means less money available as a whole, including less money going into crypto.
It is therefore impossible to see a "big bullrun" in the near future, simply because money will get out of crypto - at best- at the same rate as it goes into it.
3) "When moon then?"
Well, the question is difficult to answer at the moment, because it will mostly depend on the actions of central banks, and those actions will be determined both by economic data, political decisions, as well as geopolitics stability.
I won't dive into the last two, because they would require an entire article on their own (and I'm not paid so I do what I want 😁)... But when it comes to "economic data", it's all about the state of the economy in the largest economies of the world... And we will have to see how those evolve this year.
If inflation remains high its difficult to see how more money would flow into crypto, and if the amount of money coming into crypto does not increase, there's no reason for the price of $BTC to go up, let alone the price of altcoins...
4) Back to reality :
In short, yes there will be a "big bullrun", but probably not in the near future, as the state of global economy is not good enough to justify an increase in prices from the level they currently are at.
"But but, aren't we in the bullrun already?"... Yes we are - and that's the thing - the price of BTC has already reached its 2021 all time high, so in order for it to go way past that (as many wrongly expect), the economic conditions will have to drastically change... And they can't change overnight, they can't change just because of the halving, and they can't change just because a few more ETFs are being approved.
Alright... When then?
It's safe to expect crypto to go sideway for the largest part of the year, if the economy starts showing signs of recovery, we might have a good upside movement toward the end of the year, otherwise, it'll be postponed, to probably 2025 (until further improvement).
It is important to note, that several "bullish factors" such as ETFs approval around the world will play a role, and might move the prices up a bit depending on size... But they won't trigger that "massive bullrun" everybody is waiting for. That's the bottom line.
I've tried to keep everything simple and not overwhelm you with technical terms, but if you have any questions, don't hesitate to ask them in the comments.
-W- for Actual Finance (yes I just made that name up).
