[ ECONOMY ] Investment | Infrastructure | Megacities | DIGITAL ASSETS & CURRENCIES | Markets
A DISAPPOINTING YEAR ?
In late 2023 , the bear market phase seemed to have ended , with several indicators pointing towards a potential shift to a bull market :
• Bitcoin price stabilisation : After a prolonged period of declining prices , Bitcoin and other major cryptocurrencies showed signs of price stabilisation , suggesting that the market might have found a bottom .
• Increase in trading volumes : There was a noticeable increase in trading volumes on major cryptocurrency exchanges , indicating renewed investor interest and confidence in the market ’ s future prospects .
• Positive regulatory developments : Several countries made moves towards clearer and more favourable regulations for cryptocurrencies , which improved the market sentiment and encouraged more participation from both retail and institutional investors .
Historical Bull and Bear cycles in the Bitcoin market ( 2014-2023 )
BTC / USD in logarithmic scale — Source : Tradingview
Several events taking place in the first part of the year actually contributed to fuel optimism . The approval of Bitcoin exchange traded funds ( ETFs ) by the SEC , in early January 2024 , marked a significant step towards mainstream adoption . The growing involvement of institutional investors added credibility to cryptocurrencies as a legitimate asset class , attracting an even wider range of traditional investors .
A Bitcoin halving took place on April 19 , reducing the mining reward by half , which created expectations of reduced supply in new coins . By generating scarcity , previous Bitcoin halvings had often led to increased prices , catalysing bull cycles .
Meanwhile , with persistent inflation and accommodative monetary policies from central banks , many saw cryptocurrencies as a potential hedge against inflation . The continuous printing of fiat currencies by central banks to stimulate economies led to concerns about currency devaluation , making cryptocurrencies , particularly Bitcoin , more attractive as a store of value .
The actual performance of the cryptocurrency market in 2024 did not turn out to be uniformly positive
However , the actual performance of the cryptocurrency market in 2024 did not turn out to be uniformly positive . A comparative chart of Bitcoin prices since the beginning of 2024 shows significant fluctuations , with several attempts at bullish breakouts that failed to hold above key resistance levels . Rather than the typical dynamics of a bull run , this year ’ s evolutions have been those of a consolidating market , with support levels being repeatedly tested .
According to CoinGecko , Bitcoin ended Q2 2024 at around $ 62,734 , down 11.9 % from the beginning of the year . Meanwhile , trading volume on centralised exchanges reached $ 3.40 trillion in Q2 2024 , down 12.2 % from the previous quarter .
Institutional adoption of cryptocurrencies did strengthen in 2024 , largely thanks to the approval of Bitcoin spot ETFs . However , these effects were offset by macroeconomic volatility and the ongoing hesitation of some institutional investors to significantly increase their exposure to cryptocurrencies .
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WEJ | September 2024