Recently, driven by the expectations of spot Bitcoin and Ethereum ETF, the market has started a general rise. Various concepts of new and old currencies such as MEME and BRC20 have become popular. It seems that the bull market has quietly arrived?
For most retail investors, the market is gradually recovering, hot sectors are rotating quickly, and the quick switch from the end of the bear market to the beginning of the bull market means missing out on opportunities to double their money one by one is undoubtedly the most frustrating!
The hottest question in the market right now is, has the bull market arrived?
To get straight to the point, the webmaster will answer you directly with six reasons: yes, the bull market has begun!
Focus on the primary and secondary markets of the cryptocurrency circle. Dedicated to researching primary skyrocketing currencies and secondary high-quality potential currencies. V: hxsq808 No threshold, no fees, no exchanges, no trading links
First, the U.S. interest rate hike cycle has come to an end
As we all know, the U.S. dollar is the world's main reserve currency, and the Federal Reserve controls the global liquidity valve. Every dollar cycle in history has stirred up the global financial market, affecting the flow of capital, commodities, inflation, employment, real estate, cryptocurrencies, etc.!
Since the Federal Reserve launched the largest interest rate hike in 40 years last year, it has had a serious impact on the global economy and capital markets. The cryptocurrency market dominated by Bitcoin alone has suffered a drop of more than 80%! Putting aside the fundamentals and cycles of Bitcoin itself, the Federal Reserve's monetary interest rate policy directly affects the rise and fall of Bitcoin. Now, as the Federal Reserve has stated that inflation continues to cool, the expected peak interest rate in the United States has in fact arrived. And there is no doubt that after a year and a half of aggressive interest rate hikes, the current Federal Reserve interest rate remains unchanged at 5.25%-5.5%. Although Powell's speech is still strong, his actual actions are very honest. There is no action to raise interest rates. This is expectation management. Even if Powell has a strong expectation management ability, reality will not lie. If you can't raise it, you can't raise it. Raising interest rates is like holding your breath in water. From 2022 to now, the Federal Reserve has raised interest rates by 525 basis points. If the United States really wants to keep the economy on a soft path and not have a thunderstorm like Silicon Valley Bank in early 2023, then the Federal Reserve's interest rate hike cycle will have to end.
Second, Bitcoin spot ETF passed
Public information shows that several companies including ARK Invest, BlackRock, Bitwise, WisdomTree, Fidelity and Invesco are applying for Bitcoin spot ETFs.
The Bitcoin ETF is an important milestone moment because it can quickly meet the (traditional) market's expectations for demand without a long waiting time. The Bitcoin ETF will attract the interest of various investors, especially institutions such as family offices, private banks and hedge funds, because it provides a compliant way to gain exposure to spot Bitcoin on a global scale. There is a demand of tens of billions of dollars in the market, which will have a significant impact on the price of Bitcoin. Institutions that provide ETFs will also be incentivized to sell as much of this product as possible. If the cryptocurrency market is compared to a pond, then the passage of the ETF is to open up the channel from the pond to the sea, and there will be a steady flow of seawater into the pond. Overall, the Bitcoin ETF marks an important turning point with far-reaching impacts on the entire market.
All signs indicate that the time for the spot Bitcoin ETF to be approved seems to be getting closer. In a recent report, JPMorgan Chase said that the SEC may soon approve multiple spot Bitcoin ETF applications, and the approval time is most likely before January 10, 2024. In any case, the Bitcoin ETF will be approved sooner or later, it's just a matter of time! However, the webmaster believes that the probability of the bull market passing the ETF to add a whip to the mad bull is a little higher!
Third, production reduction
Since its creation in early 2009, Bitcoin has experienced three halvings. The block reward has gradually decreased from the initial 50 BTC to the current 6.25 BTC. It is generally predicted that the next halving will occur in early May 2024.
Past halving events show that the price of Bitcoin increased 55 times during the second halving compared to the first, and increased 13 times during the third halving compared to the second.
According to historical data, the highest price increase of Bitcoin after each halving has shown a gradually declining trend. For example, the highest price after the first halving reached $1,163, nearly 110 times the price before halving; the highest price after the second halving was $19,666, nearly 30 times the price of $663 before halving; and the highest price after the third halving was $69,000, 8 times the price of $1,451 before halving.
Therefore, we should not have too high expectations for the highest price after the next halving. Considering this trend, we can make a discount and assume that the increase in the highest price is one-fourth of the previous one. According to this estimate, the price after the next halving may be around $110,000. (There is no reference value based on historical speculation)!
Focus on the primary and secondary markets of the cryptocurrency circle. Dedicated to researching primary skyrocketing currencies and secondary high-quality potential currencies. V: hxsq808 No threshold, no fees, no exchanges, no trading links
Fourth, the Federal Reserve starts to cut interest rates
According to the forecasts of the World Bank and the International Monetary Fund, the global economic growth rate may rebound slightly next year, but the rebound will not be strong, with a growth rate of about 3.1%. The tactical easing between China and the United States is a positive signal for the capital market! Through a detailed analysis of macro data, cycles, and geopolitics, it is concluded that the worst of the external environment has passed!
According to Bloomberg data, traders are currently pricing in a 66bps rate cut by the Fed in 2024. Goldman Sachs economists expect the first rate cut to take place in the fourth quarter of 2024: We continue to expect rate cuts to begin in the fourth quarter of 2024 and to proceed at a rate of 25 basis points per quarter. Bank of America economists still expect one more rate hike in 2024, followed by three 25 basis point rate cuts starting in the second quarter of 2024. Market participants expect the first rate cut at the June 2024 FOMC meeting, followed by two more 25 basis point rate cuts in 2024, bringing the federal funds rate to 4.50% to 4.75% by December 2024, depending on inflation and economic weakness.
Fifth, FTX’s Restart
The news of FTX’s winning bid will likely be announced in December 2023, and the FTX exchange is expected to be operational in May or June 2024. FTX is expected to regain its top 3 exchange position within 12 months. Before FTX’s collapse a year ago, in its last funding round, FTX was valued at $32 billion and was said to have 8 million registered users, of which 5 million were active. Despite the Sam Bankman-Fried scandal and recent conviction, the FTX brand and its user base remain of significant value. By December 2023, a new owner is likely to take over the exchange. We believe FTX could be sold for $2-3 billion, an attractive price considering the number of registered users and its global brand recognition. The customer churn is largely attributed to SBF’s inner circle, while the exchange’s brand value is relatively intact.
Matrix on Target expects that the little-known cryptocurrency exchange "Bullish" will acquire the entity. Well-funded through Block.one ownership and well-connected to deep-pocketed investors, "Bullish"'s exchange is extremely lacking in an active user base (and is in desperate need of a better name, in "Matrix on Target's" humble opinion). FTX's price tag may continue to benefit FTX creditors. It is estimated that FTX creditor claims are trading above 55 cents on the dollar, and this was before clear news about the sale of the exchange to another investor. SEC Chairman Gensler also said that FTX may be restarted under new leadership. This shows that cryptocurrency is here to stay and the SEC is clearly supportive. Regardless of the outcome, this turning point for FTX will undoubtedly be an important moment in the history of cryptocurrency. It not only concerns the fate of FTX, but will also have a profound impact on investor confidence, market regulation, and the long-term development of the cryptocurrency ecosystem. (Purely can't find a reason to random +)
6. The US presidential election
A recent survey by Grayscale and The Harris Poll found that as many as 38% of potential voters said they would consider their stance on cryptocurrency policy when they vote in the midterms. Here are some of the more interesting numbers from the survey: 60% of Americans believe the economy is on the wrong track, 80% of Americans want clearer regulation of the crypto industry, and 20% of registered voters own cryptocurrency. 52% of Americans believe that cryptocurrency is the future of finance. Since cryptocurrency is generally a bipartisan issue, it is not surprising that the policies of the candidates may affect some votes. Presidential Election: Biden has a slight advantage. Biden, Trump, and DeSantis are the main candidates for the general election, and the probability of a Biden VS Trump primary election is the highest. Biden currently has a slight advantage in the approval rating.
Speaking of crypto candidates, a recent CoinDesk article found that more than $80 million in campaign contributions came from the crypto industry during this election cycle. Cryptocurrency as a topic has been hotly debated in the early days of the U.S. presidential campaign, and just last week's first Republican debate showed that cryptocurrencies may become an important issue for candidates to compete for mainstream attention. The growing importance of cryptocurrencies in the U.S. Congress and international financial regulators also shows that even if some candidates remain neutral on cryptocurrencies, it does not mean that they have no stance on cryptocurrencies, as some of them have clearly expressed their support. Under the influence of public opinion and capital, there is no reason for the U.S. government to reject cryptocurrencies.
Secondly, in this special year, compared with previous elections, next year's election will have a huge impact on the US political landscape. Because in the past two years, the United States has faced rising inflation, the fear of economic recession, concerns about the integrity of the election, and deep divisions on social issues. This means that the next government has to come up with solutions to these problems, and according to the unique nature of the United States, printing money is the only choice!
Is the bull market coming? Yes. Compared with the 3,000-point defense battle of the A-share market in 2015, the 28 million-fold increase of the Bitcoin in 2015 has made Bitcoin a bull market. Looking back at the signs before the start of the Bitcoin bull market, there were two crashes before the start of the bull market in 2016. The first was the theft of Bitfinex, which fell by more than 30% in one day. The second was that it fell to 6,000 a day or two after reaching 8,000 at the end of the year. The bull market started after these two crashes. It is similar to 312 in 2020, but 312 is more cruel and violent. The emergence of this desperate G-spot is mainly to harvest leverage in the market, and the bulls are annihilated. This has become the standard for the start of a bull market.
If you encounter a cliff waterfall again, don't doubt it, this is the signal before the market starts a bull run → smashing the cup! Remember not to be timid, all in!
Focus on the primary and secondary markets of the cryptocurrency circle. Dedicated to researching primary skyrocketing currencies and secondary high-quality potential currencies. V: hxsq808 No threshold, no fees, no exchanges, no trading links
