The past two years have been challenging for the crypto world following the end of the historic 2021 bull run. Rising inflation prompted central banks to hike interest rates, causing Web3 funding, NFT prices, and metaverse enthusiasm to fade—along with billions in investor capital.
High-profile fraud and cyberattacks involving platforms like FTX and Luna led to market crashes, custodial bankruptcies, and a series of arrests. In response, self-custody emerged as the go-to strategy for crypto enthusiasts in 2023.
Despite these setbacks, the crypto market is poised for a potential bull run in 2024 and 2025, driven by several positive trends and developments. This time, it might not just be hype—it could mark a turning point where technology like AI transforms the global financial industry.
This optimism isn’t limited to crypto enthusiasts. Many analysts also foresee a possible crypto bull market, though they differ on its timing, potential outcomes, and catalysts.
In this article, we explore major events that could unleash the next wave of crypto growth and examine challenges that might stand in the way of a large-scale recovery.
Bitcoin Halving (April 2024)
In the crypto space, one thing is undeniable: Bitcoin is the leader. As the pioneering cryptocurrency, Bitcoin is entering the new year with several positive developments—the most important being the Bitcoin halving.
The Bitcoin halving is an event that occurs approximately every four years (or every 210,000 blocks), reducing the block reward for miners by half. This means fewer new BTC are minted, increasing Bitcoin’s scarcity and potentially driving up its value.
This event is highly significant for the crypto community. While opinions vary on its broader impact, the market tends to react strongly.
Historical data shows that each halving—in 2012, 2016, and 2020—profoundly influenced the market in the following years, pushing Bitcoin’s price to record highs.
After the 2024 halving, the block reward will drop to 3.125 BTC. This number will halve again in 2028 and beyond. As miners, institutional investors, and retail investors begin accumulating sats (the smallest unit of Bitcoin), we may see another major supply shock.
It’s important to note that financial markets often price in future events in advance. With widespread anticipation building around the halving, surprises could occur before or after the event—especially given renewed interest from major traditional finance players.
The 2021 crypto peaks, which saw Bitcoin reach $63,000 and $69,000, coincided with major events like Coinbase’s IPO and El Salvador’s adoption of BTC as legal tender. However, prices corrected sharply afterward.
The halving isn’t just a news event—it represents a fundamental shift in Bitcoin’s mining and issuance process. With over 19 million BTC already in circulation and fewer than 2 million left to be mined (until 2140), now may be a good time to accumulate Bitcoin at lower costs.
BlackRock’s Bitcoin ETF
BlackRock, an asset management giant overseeing $9 trillion in assets, has applied for a spot Bitcoin exchange-traded fund (ETF). Given BlackRock’s near-perfect ETF approval record (576:1), this application has a high chance of being approved by the U.S. Securities and Exchange Commission (SEC).
If approved, this ETF could significantly boost Bitcoin’s visibility and mainstream adoption by establishing it as a recognized and secure asset class—one that can be safely custodied and traded by regulated institutions, much like traditional stocks.
A Bitcoin spot ETF has long been anticipated by Bitcoin enthusiasts for several reasons:
- It could attract new retail and institutional investors.
- It may drive wider adoption, increase liquidity, reduce volatility, and lead to more predictable price movements.
- Its regulated nature is highly appealing, as government oversight could help prevent illegal financial activities.
According to the Managing Director of Morgan Creek Digital, BlackRock won’t be the only player in the Bitcoin ETF space. The SEC may also approve similar ETF proposals from other global asset management firms like ARK Invest and Fidelity in the near future.
Ethereum’s Sharding Upgrade
Faster and cheaper transactions are key to driving widespread adoption of decentralized platforms. As a leading player, Ethereum recognizes the need to support its growing Web3 ecosystem with scalable and affordable solutions.
While Ethereum’s current layer-2 rollup solutions demonstrate the ability to process data quickly and securely, they often come with high costs—diminishing some of their advantages.
To address this, Ethereum is actively working on a series of upgrades. The first initiative is Proto-Danksharding (also known as EIP-4844), which aims to reduce rollup costs by introducing “data blobs.”
These blobs store on-chain data that remains valid for only a limited period—typically one to three months. By avoiding permanent storage of this data on Ethereum, significant cost savings can be achieved.
Currently, over 90% of rollup costs go toward maintaining vast amounts of data—whether actively used or not. Under the new model, the responsibility for storing rollup data falls on entities that actually need it, such as indexing services and decentralized exchanges (DEXs).
Once implemented, data blobs are expected to greatly enhance Ethereum’s processing capacity and lower transaction costs. Proto-Danksharding is targeted for late 2023.
Following this initial phase, Ethereum plans to develop full Danksharding, which aims to achieve millions of transactions per second. If successful, these upgrades could attract a new wave of decentralized applications (dApps) to the Ethereum platform.
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New Narratives: Crypto AI and Inscriptions
The rise of artificial intelligence in 2023 has led to significant price increases for blockchain platforms integrating AI technology. Leading projects in the crypto AI space include SingularityNET, Phala Network, and Cortex.
Integrating AI as a core feature is expected to enhance the appeal of crypto platforms, driving higher demand for their digital assets.
As blockchain and AI continue to converge within the Web3 ecosystem—along with emerging metaverse narratives—digital assets designed for these use cases are likely to come into focus.
Additionally, this year saw controversial new developments on Bitcoin following its Taproot upgrade. The introduction of the BRC-20 token standard and Bitcoin Ordinals created new demand for Bitcoin block space, driving up transaction fees and pushing Bitcoin above $30,000 in the first quarter.
While this development sparked debate, it also highlighted Bitcoin’s evolving dynamics and potential as a versatile asset.
Macroeconomic Recovery
According to S&P Global, crypto and macroeconomic conditions are correlated. When central banks raise interest rates to combat inflation, it’s no surprise that risk assets like Bitcoin suffer.
The post-2020 market crash showed that when governments implement economic stimulus measures and keep interest rates low to revive struggling markets, volatile assets like cryptocurrencies and stocks can surge in value due to incoming capital.
As a potential recession looms, central banks and regulators may ease monetary policy in 2024 or 2025 after achieving their inflation targets. This move would aim to create jobs and prevent economic collapse (according to Arthur Hayes, this may not occur until around 2026).
Increased money supply could lead to further investment in cryptocurrencies like Bitcoin—both as speculative investments and as hedges against inflation.
S&P Global also offers another interesting perspective: government actions aren’t always the primary driver of crypto growth. When recessions stem from poor fiscal policy, the public often turns to digital assets as a safe haven.
This choice seems reasonable since decentralized assets operate independently of government control or influence. However, recent crypto price volatility shows that digital assets are not yet reliable safe-haven assets.
Regulatory Developments
- High-Profile Scandals: The FTX scandal and Celsius bankruptcy severely damaged the crypto industry’s reputation. As a result, the public is again focused on crypto safety and legality. These events—along with other hacks and scams—have prompted regulators to propose stricter measures for the growing industry. Another major fraud case or lawsuit could lead to even tighter legal action.
- U.S. Presidential Election: With President Biden and former President Trump officially running for office, their stance on crypto could impact the anticipated bull market. Both candidates have shown some support for cryptocurrency. For example, President Biden signed an executive order directing the exploration of a regulatory framework for digital assets. Similarly, former President Trump has ventured into NFTs and reportedly holds $2.8 million in Ethereum. While these are positive signs, it’s important to note that their positions may shift with public sentiment. Given their influence, any negative comments from them could adversely affect the crypto market.
- SEC and Global Regulation: Unfortunately, the FTX scandal gave financial regulators like the SEC potential理由 to shut down or heavily restrict crypto operations. Over the past two years, the SEC and its Chair Gary Gensler have actively targeted crypto projects they consider securities (like XRP and Hex) and centralized exchanges (CEXs) they believe violated U.S. law (like Binance and Coinbase). However, during the U.S. election period, Gensler and his team may be less active due to the significant interests involved. It’s also worth noting that Gensler has acknowledged that Bitcoin is not a security and recognizes its role in bull markets. Additionally, improved regulation is expected globally—from the EU to Asia—including in the DeFi space.
Frequently Asked Questions
What is the Bitcoin halving?
The Bitcoin halving is an event that occurs every four years, reducing the block reward for miners by half. This decreases the rate at which new Bitcoin is created, increasing its scarcity and potentially driving up its price over time.
How could a Bitcoin ETF impact the market?
A spot Bitcoin ETF could make it easier for institutional and retail investors to gain exposure to Bitcoin without holding it directly. This may increase demand, liquidity, and mainstream adoption while reducing volatility.
What is Ethereum’s sharding upgrade?
Sharding is a scalability solution that splits the Ethereum blockchain into smaller partitions called shards. This allows transactions to be processed in parallel, increasing throughput and reducing fees. The upgrade is being rolled out in phases, starting with Proto-Danksharding.
Is crypto a good hedge against inflation?
While some view Bitcoin as digital gold and a hedge against inflation, its price remains highly volatile. Macroeconomic factors, regulatory news, and market sentiment all influence its short-term value, so it may not yet be a reliable store of value.
How does regulation affect crypto prices?
Positive regulatory developments often boost market confidence and drive prices up, while negative news like bans or strict regulations can cause sell-offs. Clarity and supportive frameworks are generally seen as beneficial for long-term growth.
Should I invest in crypto before the bull market?
Investing in crypto carries significant risk. Always do your own research, understand the technology and market cycles, and only invest what you can afford to lose. Diversifying and dollar-cost averaging can help manage risk.
Conclusion
Based on the factors discussed here—and many others—the crypto world holds great potential in 2024. Digital assets, led by Bitcoin and Ethereum, could once again become among the world’s most sought-after commodities.
However, there’s still a long road ahead. Many holders lose hope just before conditions improve. Staying committed and making rational, non-emotional investment decisions requires determination and resilience.
The market will undoubtedly remain volatile as large players attempt to profit at the expense of retail investors. The best approach is to stay informed, remain vigilant against malicious activities, and avoid impulsive investments.
If you plan to invest, conduct thorough research, identify trends from past cycles, and only allocate funds you can afford to lose. Spreading out your purchases can also help achieve a more stable average price.