The value of the cryptocurrency economy is currently hovering around $2.15 trillion, after a modest gain on Friday morning. That leaves just 88 days until the end of the calendar year, 32 days until the 2024 US Election Day, and 34 days until the next meeting of the US Federal Reserve. With developments such as rising tensions in the Middle East, many factors could fuel or stall Bitcoin's rally. Here's a closer look at four key issues that could shape BTC's price in the coming months.
Bitcoin's 2024 Outlook and Events That Could Shape the Rest of the Year
Crypto enthusiasts are now speculating whether BTC’s bull run will remain strong or subside for the remainder of 2024. Bitcoin traditionally performs well in the final quarter of the year. However, September surpassed expectations and October started as “Downtober” instead of the long-anticipated “Uptober,” reminding people that past patterns do not guarantee future results. Some in the community are feeling gloomy, believing that the bull run appears to be over.
Bitcoin Quarterly Returns | Source: Coinglass
On the other hand, many liken BTC to a beach ball that is buoyed just below the water’s surface, bobbing below its all-time high of $73,000 and ready to bounce, potentially reaching a new high. Now, there are a number of developments that could impact Bitcoin’s price in the run-up to 2024, and many market participants will be watching these events to see if they cause volatility in BTC’s value.
US Election
The crypto community is buzzing about the potential impact of the 2024 US election between Kamala Harris and Donald Trump. However, many investors and analysts believe that BTC prices will rise in 2024 regardless of who enters the White House, although short-term price fluctuations are expected around the election. Financial giant Standard Chartered predicts that BTC could reach $125,000 under a Trump administration, while a Harris presidency could see prices reach $75,000. On the other hand, brokerage and research firm Bernstein believes that Trump will push BTC to $90,000, but drop it to $35,000 under Harris.
Meetings of the US Federal Open Market Committee
Many investors and analysts predict that a potential Fed rate cut could boost Bitcoin for good reason. Lower interest rates typically make borrowing easier, increasing liquidity in financial markets and prompting investors to chase higher returns in riskier assets like cryptocurrencies. Often considered a risk asset, Bitcoin tends to thrive during periods of loose monetary policy. The Fed has two more Federal Open Market Committee (FOMC) meetings in 2024: November 8 and December 18.
War and tension in the Middle East
The Middle East is currently facing escalating tensions after a series of hostile events. On Tuesday, Iran launched a direct military attack on Israel, using both missiles and drones. G7 leaders were quick to condemn the attack, calling it a serious threat to regional stability. The incident has escalated the ongoing conflict between Israel and Hezbollah in Lebanon, raising fears of a larger war in the region.
Israel has vowed to retaliate, increasing investor caution and pushing the market from risk-on to risk-off. Traditionally, investors shy away from riskier assets during times of geopolitical uncertainty. This shift in caution often leads to a sell-off in assets like cryptocurrencies as traders move their money into traditionally safer havens. Iran’s latest missile attacks sent Bitcoin prices sliding below $60,500.
Bitcoin ETF Options
Bitcoin ETF options could provide several benefits to BTC prices, including improved price discovery, increased 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 more investors. This influx of activity is expected to increase trading volume, driving demand for Bitcoin ETFs and, in turn, BTC itself. Options also provide leverage, allowing investors to access larger amounts of BTC with less initial capital. Leverage amplifies market movements, potentially leading to stronger price gains when sentiment is favorable.
Cryptocurrency Fear and Greed Index | Source: alternative.me
Balancing immediate market volatility with long-term growth potential
Over the past year, Bitcoin’s trajectory has remained uncertain, influenced by external forces such as geopolitical instability and changes in financial policy. Market participants are closely monitoring these variables, recognizing that the future performance of the king of coins depends not only on historical trends but also on the changing global landscape. The culmination of these events will likely determine the direction of the market.
With both optimism and skepticism about Bitcoin’s potential, the cryptocurrency community is facing a critical period. Investors must weigh short-term volatility against long-term growth prospects, recognizing that decisions made now will shape the asset’s future in an unpredictable market in 2024.
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