Why crypto asset prices are set to skyrocket in 2024

Akin to other years, 2023 has been filled with ups and downs for the crypto market. From Ripple’s victory over the United States Securities and Exchange Commission (SEC) over XRP to Sam Bankman Fried’s guilty verdict in FTX fraud trial to Changpeng Zhao resigning from the Binance CEO position, the crypto industry indeed had a roller coaster ride in 2023. 

Not to mention the numerous high-profile protocol hacks and crypto scams that wrecked many investors, the SEC’s onslaught on numerous centralized crypto exchanges, the positive developments with crypto regulations in some countries and the unexpected resurgence of memecoins. These and many more occurrences contributed to making 2023 a memorable year for the crypto industry. 

While Q1 to Q3 of 2023 will principally be recalled by many as a bear market season, 2023 Q4 recorded significant growth in the crypto market and most likely marked the beginning of the next crypto bull market. Notably, bitcoin (BTC) surpassed $44,000 in December 2023 with numerous altcoins such as Solana (SOL) posting multi-digit gains.

Will the uptrend in crypto asset prices continue in 2024? Whether you’re an expert investor or new to cryptocurrencies, this article discusses some of the key drivers that could contribute to crypto asset prices surging higher in 2024. 

Exploring factors for a potential increase in crypto asset prices in 2024

Below are some of the factors that could sustain the bullish sentiments in the crypto market in 2024: 

Maturation of institutional adoption

One of the pivotal factors poised to elevate crypto asset prices is the ongoing growth of institutional adoption. In recent years, traditional financial institutions and corporations have increasingly recognized the value of cryptocurrencies as legitimate investment assets. This is evident in the influx of spot and futures bitcoin ETF proposals from numerous global asset managers. 

Accordingly, the entry of institutional players into the crypto industry will not only lend credibility but also inject substantial capital into the crypto market. As more institutions continue to embrace cryptocurrencies and add them to their portfolios in 2024, the demand for crypto assets is likely to escalate, potentially driving prices upward.

Regulatory clarity

The lack of clear regulations in the developing industry has been among the factors hindering crypto mass adoption. In other words, regulatory clarity plays a pivotal role in shaping market sentiment as it can help provide a sense of legitimacy and security in the crypto market, instilling confidence among institutional and retail investors. 

Notably, 2024 would probably see more countries such as the United Kingdom issuing clear regulatory frameworks for crypto assets trading and operations. With this expected development, individuals, businesses, governments and institutions are more liable to perceive cryptocurrencies as regulated and secured assets, leading to increased adoption and liquidity in the crypto market. In turn, this might sustain the uptrend in crypto asset prices in 2024. 

Bitcoin halving 

Another major factor establishing 2024 as a bullish year for crypto assets is the bitcoin halving event. For the uninitiated, bitcoin halving is a programmed event designed to occur approximately every four years or after every 210,000 blocks mined on the Bitcoin network. It is an integral component of Bitcoin’s underlying code, specifically implemented to manage the supply of new bitcoins entering circulation. 

Notably, the next Bitcoin halving event is expected around April 2024. Given previous bitcoin halvings led to massive rallies in the price of BTC and other altcoins, analysts speculate the 2024 halving event would have a similar impact on crypto asset prices. 

Particularly, the 2012 halving saw Bitcoin’s price surge from around $12 to over $1,000 in the subsequent year. Similarly, after the 2016 halving, BTC embarked on a bull run that culminated in its historic high of nearly $20,000 in late 2017. Moreover, the leading cryptocurrency reached its all-time high of $69,000 after the 2020 halving event. If this historical pattern continues, the next halving event could act as a catalyst for a bull run in 2024.

Continued DeFi innovations and increased adoption

Decentralized finance (DeFi) has emerged as a revolutionary concept within the crypto ecosystem, challenging traditional financial paradigms. Therefore, the continued innovation within the DeFi niche in 2024 has the potential to attract a significant influx of capital and investment to crypto assets. Said differently, investors seeking yield and decentralized financial services may fuel increased demand for DeFi tokens, potentially driving up their prices. 

Potential approval of spot bitcoin ETFs

2023 saw top global asset managers —including BlackRock, Grayscale and Fidelity Investment— submit proposals for their respective spot bitcoin Exchange-Traded Funds (ETFs). While the SEC is yet to approve any of these requests at the time of writing, there is a possibility of approval in 2024. 

Spot bitcoin ETFs, if approved, would offer investors regulated exposure to bitcoin. This could attract a wave of new institutional and retail investors to the crypto market, boosting liquidity in the crypto market and increasing adoption. Therefore, the anticipated approval of bitcoin spot ETFs by the U.S. SEC in 2024 has the potential to drive up crypto asset prices. 

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Final thoughts

Characterized by changing trends and diverse market cycles, the crypto market is poised for another chapter of potential growth in 2024. A multitude of factors including maturation of institutional adoption, positive crypto regulatory developments, the upcoming bitcoin halving event and potential approval of spot bitcoin ETFs, hold the promise of influencing crypto asset prices in 2024. Nonetheless, there are no guarantees that crypto asset prices will skyrocket massively in 2024. Therefore, only invest what you can afford to lose given cryptocurrencies are highly volatile digital assets.  

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