Experts analyse Bitcoin rally and offer forecast for 2024
As 2024 approaches, Matrixport looked back at how the current Bitcoin rally had unfolded, while VanEck analysts shared 15 predictions for the crypto market’s outlook.
- Matrixport experts reaffirmed their February price forecast for the first cryptocurrency and outlined five stages preceding its rally.
- In the year ahead, VanEck expects Binance to cede leadership and NFT to stage a comeback.
VanEck predictions
VanEck researchers begin their list with the possibility of a US recession and the long-awaited approval of a spot Bitcoin-ETF. In their view, the new investment product could attract around $2.4bn, supporting the price of digital gold.
VanEck ? 15 Crypto Predictions for 2024
Prediction #1. The US recession will finally arrive, but so will the first spot #Bitcoin ETFs. Over $2.4B may flow into these ETFs in Q1 2024 to support Bitcoin’s price.
— VanEck (@vaneck_us) December 7, 2023
The fourth halving in the Bitcoin network will lead to “minimal deviations” in the market, but after the event the asset’s price will rise, benefiting some budget miners.
According to the third forecast, the price of the first cryptocurrency will reach a new all-time high in the fourth quarter of 2024, potentially driven by political events and regulatory changes following the US presidential election.
Ethereum will not dethrone Bitcoin, but will still outperform the stock returns of the largest technology companies.
After the implementation of proto-danksharding (EIP-4844) on second-layer networks, EVM-compatible protocols will capture a large share of trading volume and locked funds.
Experts believe NFT activity will rebound to record highs, led by Ethereum, while the Bitcoin network’s segment will continue to develop thanks to the Ordinals protocol .
The seventh prediction is not good news for the leaders: Binance will lose its lead in spot trading, intensifying competition among OKX, Bybit, Coinbase and Bitget. Coinbase’s daily futures market turnover could exceed $1 billion, as the key moment will be the inclusion of a regulated index.
The market capitalization of stablecoins will reach a new all-time high and exceed $200 billion. USDC will compensate for the loss of market share, thanks to institutional adoption, especially in developing L2 networks.
Decentralised exchanges will capture a record share of the spot market thanks to fast blockchains like Solana and wallets enabling automated transactions.
VanEck believes that the advent of Bitcoin staking on the Lightning Network will open new avenues for passive income.
The blockchain game Immutable X will reach a record online level of 1 million daily users.
Solana will enter the top three by market cap, total value locked and users, potentially overtaking Chainlink.
DePin projects, notably Hivemapper and Helium, will gain wider adoption as efficient alternatives to traditional tools such as 5G networks.
New governance standards will spur growth in corporate crypto holdings, VanEck noted. By 2025, a theoretical large financial institution could launch a “quasi-public blockchain with access to a public network”.
Finally, researchers noted that KYC-compliant decentralized platforms led by Uniswap will outperform rivals that do not support this feature.
Looking back at the rally
Matrixport analysts in a recent report reaffirmed their February forecast of Bitcoin at $45,000 by the end of 2023.
Our analysis links #Bitcoin’s +165% surge in 2023 to a strategic mix of crowd psychology, macro factors, and considerations of liquidity and market structure. The #cryptocurrency’s approach to its $45,000 year-end target, set on February 1, 2023, highlights the impact of the… pic.twitter.com/puq8RHzjgT
— Matrixport (@realMatrixport) December 8, 2023
The head of the research department at the company, Marcus Tilen, stressed that the premier cryptocurrency “does not move randomly”. Its dynamics are driven by “crowd psychology and macroeconomics”, and short-term trends are analysed using “liquidity metrics and the state of market structure”.
Tilen notes that Bitcoin’s rally to date has unfolded in five stages:
- reaction to inflation trends;
- the unfolding of the banking crisis;
- the spike after BlackRock filed for a spot ETF on the first cryptocurrency base;
- stimulus from changes in US Federal Reserve policy, which slowed the pace of rate hikes;
- developments in SEC rules governing spot Bitcoin ETFs.
“The bankruptcy of crypto-lending and borrowing platforms in 2022 and the collapse of banks associated with digital assets in March 2023. Retail traders faced difficulties swapping fiat for crypto, and that is why this year’s rally was mostly concentrated on Bitcoin rather than high-Beta altcoins that retail investors typically prefer,” the analysts noted.
The big question now is how Bitcoin will react to ETF approval.
In late December, Matrixport forecasted that Bitcoin would rise to $63,140 by April 2024 and to $125,000 by the end of the next calendar year.
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