Bitcoin's Future in the Spotlight: 4 Key Factors That Could Make or Break It in 2024
At the time of publication, the cryptocurrency economy stood at $2.14 trillion, after a modest rise on Friday morning. There are 88 days left in the year, 32 days until the 2024 US Election Day, and 34 days until the next Federal Reserve meeting. With several developments, including rising tensions in the Middle East, a variety of factors could either fuel or halt Bitcoinโs price rally. Hereโs a breakdown of the four key issues that could shape Bitcoin prices in the coming months.
Bitcoin Predictions for 2024 and the Events That Could Shape the Rest of the Year
At the moment, crypto enthusiasts are still wondering whether Bitcoinโs price rally will hold strong or fade for the rest of 2024. Traditionally, Bitcoin performs well in the last quarter of the year. However, September defied expectations, starting October as a โbull Octoberโ instead of a โhighly anticipated October,โ reminding everyone that past patterns do not guarantee future results. Some in the crypto community are feeling gloomy, believing that the rally may have come to an end.
On the other hand, others liken Bitcoin to a beach ball that has been pushed just below the surface of the water, oscillating below its all-time high of $73,000, and ready to rise, which could lead to new price highs. At present, several developments could affect the price of Bitcoin in the future in 2024, and many cryptocurrency market participants will be watching these events to see if they will cause fluctuations in the value of Bitcoin or not.
US elections
Many crypto market watchers are talking about the potential impact of the 2024 US election between Kamala Harris and Donald Trump. However, many crypto investors and analysts are convinced that Bitcoin prices will rise in 2024, regardless of who wins the White House, although short-term price fluctuations are expected around the election. Financial giant Standard Chartered expects Bitcoin to hit $125,000 under a Trump administration, while a Harris presidency could see it reach $75,000. Meanwhile, brokerage and research firm Bernstein suggests that Trump could push Bitcoin to $90,000, but that under Harris, Bitcoin could fall to $35,000.
Federal Reserve Federal Open Market Committee Meetings
Many investors and analysts are expecting potential interest rate cuts by the US Federal Reserve to give Bitcoin a boost, and for good reason. Lower rates typically make borrowing more expensive, increasing liquidity in financial markets and prompting investors to chase higher returns in riskier assets like cryptocurrencies. Bitcoin is often viewed as a risky asset, and tends to thrive in periods of easy monetary policy. The Fed has two Federal Open Market Committee (FOMC) meetings remaining in 2024: one on November 8 and the final on December 18.
War and Tensions in the Middle East
The Middle East is currently facing heightened tensions following a series of hostile incidents. On Tuesday, Iran launched a direct military attack on Israel, using missiles and drones. Leaders of the Group of Seven nations were quick to condemn the attack, describing it as a serious threat to regional stability. The incident has intensified the ongoing conflict between Israel and Hezbollah in Lebanon, raising fears of a wider war in the region.
Israel has vowed to retaliate, further ratcheting up investor caution and pushing markets from a risk-on to risk-off stance. Historically, during times of geopolitical turmoil, investors move away from riskier assets. This cautious shift often leads to sell-offs in assets like cryptocurrencies as traders move their money to traditionally safer havens. The latest Iranian missile strikes sent bitcoin tumbling below $60,500.
Bitcoin ETF Options
Bitcoin ETF options could offer several benefits to Bitcoin prices, including improved price discovery, greater institutional participation, and expanded hedging opportunities. The launch of options tied to Bitcoin ETFs could significantly boost market liquidity. By allowing traders to take more strategic positions, options attract a broader range of investors. This influx of activity could lead to increased trading volumes, which could increase demand for the underlying Bitcoin ETFs and, by extension, Bitcoin itself. Options also provide leverage, allowing investors to gain exposure to larger amounts of Bitcoin with less upfront capital. This leverage can amplify market movements, potentially leading to stronger price gains when sentiment is favorable.
Balancing immediate market volatility with long-term growth potential
As the year progresses, Bitcoinโs trajectory remains uncertain, influenced by external forces such as geopolitical instability and shifts in fiscal policy. Market participants are closely monitoring these variables, aware that Bitcoinโs future performance depends not only on historical trends but also on the evolving global landscape. The culmination of these events is likely to determine the direction of the market.
With both optimism and skepticism surrounding Bitcoinโs potential, the crypto community is facing a pivotal period. Investors are forced to balance short-term volatility with long-term growth prospects, knowing that decisions made now could shape the assetโs future in an unpredictable market in 2024.
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