The Game-Changers for Crypto in 2024

Bitcoin is simultaneously the most demanded and least understood currency of the modern age. What was once a digital coin worth a humble $0.009 in 2009 has evolved to become the world’s largest and most liquid digital asset.

To put that into perspective, a $100 investment into Bitcoin in 2009 would be worth nearly $500 million today, and while many regard Bitcoin as the digital asset of the future, others are skeptical about the longevity of its market dominance and its potential significance in everyday life.

During 2023, Bitcoin gloriously escalated by a whopping 155% and took little time to cool off, thus enjoying high buying power pressure.

Bitcoin relentlessly rose to yearly highs above $44,400, due to several factors: 

Growing ETF excitement

Sentiment-driven Bitcoin is enjoying upward momentum, predominantly driven by the excitement surrounding the historic introduction of spot Bitcoin exchange-traded funds. The approval of Bitcoin ETFs could bridge at least $15 billion towards the Bitcoin ecosystem, which will stem from investors that are eager to invest into Bitcoin without facing the underlying risks of owning the cryptocurrency.

Scarcer by the minute

Given that the finite maximum supply of Bitcoin is 21 million coins, the value of Bitcoin is inherently deflationary as long as demand remains robust. The exponential growth of Bitcoin mining activity – which is when new Bitcoins are being created via computerized systems solving complex equations – is also playing a major part in increasing its scarcity as mining diminishes the total number of unmined Bitcoin, currently standing at less than 7% of the maximum supply. 

This makes Bitcoin similar to gold, and some would dub BTC as ‘digital gold’ since it possesses characteristics of bullion, notably its store of value and value appreciation in times of uncertainty. 

Not just that, but the number of investors who buy & hold Bitcoin is climbing, and the diamond hands are holding on to their BTC holdings harder and longer than ever before. Long-term holders remain reluctant to sell-off their Bitcoin holdings, making Bitcoin scarcer and ever-more demanded.

Worth nearly $43,000 as of the end of 2023, the world’s largest cryptocurrency continues to steal the spotlight, evident in its market capitalization of over $830 billion, and the aforementioned drivers may exert the momentum for Bitcoin to potentially retrieve all-time highs before the highly-anticipated halving event that will take place in April 2024. Or, will the story turn out completely different?

Bitcoin halving

Hand-in-hand with the scarcity effect of the upcoming BTC halving event, it is expected that 2024 will bring about a new peak for Bitcoin. Ultimately, these growth drivers leave little room for a major and prolonged price correction to take place, albeit theoretically inevitable despite short-term traders capitalizing on Bitcoin’s recent uninterrupted price increase. 

Learn more about the effects of Bitcoin halving in our previous study!

The contagious optimism surrounding Bitcoin is evident. Readings from the Crypto Fear & Greed Index by Alternative.me, which calculates the sentiment towards Bitcoin by aggregating multiple market key performance indicators, highlighted a “greed” score of 74 out of 100; a score last achieved in November of 2021. What does it mean? There are various interpretations but one thing is for sure: emotions overcome reason. 

Correction on the horizon?

The more Bitcoin grows, the deeper (and potentially more prolonged) the price correction may be, and here’s why. In late October, Glassnode data showed that 80% of Bitcoin addresses are in profit – a time when Bitcoin was priced at $34,000. Also, as of the end of December 2023, there were more than 44 million Bitcoin addresses in profit. Given that, complemented by the HODL Waves metric which indicates that more than 15% of BTC supply is held by 2020 bull market buyers, more BTC growth will likely prompt a large-scale sell-off and hence a major price correction is expected to take place.

In theory, the more Bitcoin grows, the more likely it is that its holders will be encouraged to sell-off their firm holdings, and so the more imminent and sharper the price correction may be. What’s more important to realize is that a major BTC price correction will likely impact the entire crypto industry, as Bitcoin is the most influential cryptocurrency in the market. 

Bitcoin’s market dominance neared 50% as of 2023’s year-end, meaning that more than half of the crypto industry’s total value of $1.6 trillion is attributed to Bitcoin’s market capitalization. Hence, Bitcoin’s price behavior is a large influencer of the value of the majority of cryptocurrencies. Given that, a major decline in Bitcoin is likely to encourage widespread sell-offs that would result in a significant slash in the total crypto market cap.

BTCUSD - 1 Day Time Frame

As seen in the chart provided, a new support level could have formed at the $40,000 price since Bitcoin bounced off this level in a rather quick manner. Technically speaking, a major price retreat may take place when Bitcoin increases in value to $48,000 or even towards the $55,000 mark, to then potentially decline to $40,000 if not to $36,000 lows.

Is the story of turning $100 into nearly $500 million in 14 years replicable? And, apart from Bitcoin, are there any digital assets that can achieve a comparable success?

No one can answer the question with a clear yes or no. It’s a burgeoning universe comprising altcoins, decentralized finance, and more, each contributing to a diverse and innovative landscape. This diversification signals maturity in the market, offering investors and users a wide array of choices tailored to different needs and risk appetites.

The resurgence of positive sentiment towards digital assets has revitalized the crypto market once again after a pessimism-stricken 2022, and this has given rise to game-changers which have a great potential in transforming how we perceive modern finance.

In the ever-evolving world of digital finance, the rise of Web3, increased blockchain activity, and the growing crypto ecosystem are pivotal forces reshaping the crypto industry. As a result, multiple investment options have come to light and have the potential to enjoy prosperity.

What might be the 10 game-changers for crypto in 2024?