Messari flags signs of a continued Bitcoin rally

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In 2024, the crypto market is set to enter a bull run, with Bitcoin at the helm and outpacing most other assets. The forecast comes from Messari founder and CEO Ryan Selkis.

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CRYPTO THESES FOR 2024

For the fifth year in a row, I wrote Messari’s annual report to celebrate crypto’s survivors and builders.

Crypto remains inevitable.

Here’s why:https://t.co/NY6lgUDOgL pic.twitter.com/yj2PEdYyVI

— Ryan Selkis (d/acc)? (@twobitidiot) December 19, 2023

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In the CRYPTO THESES 2024 analytical report, the expert noted that it is hard to name exact levels at which Bitcoin would trade. According to him, many inputs influence such as policy Fed, stock market trends, and the state of the US economy.

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However, in the long run, the world is moving toward a digital era in which Bitcoin becomes the digital analogue of gold; the predicted parity with the precious metal would push Bitcoin’s price above $600,000.

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“And remember: gold has many macroeconomic tailwinds, so this level is not necessarily the ceiling. If monetary crises become serious enough, no price is too high: 1 BTC — always 1 BTC,” the analyst said.

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Why Bitcoin is set to keep rising in 2024

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Selkis listed a number of signs that the leading cryptocurrency could keep growing next year.

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Indicator MRVR of Bitcoin is at 1.3 — values below 1 indicate an accumulation phase, and a reading above 3 generally signals a cycle top. The cryptocurrency is currently in a recovery phase and, despite the 2023 rally (roughly 150%), remains a good investment, according to the head of Messari.

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Bitcoin’s dominance index has been recovering in recent months but remains far from the highs reached during the 2017 and 2021 bull runs. The indicator now stands just above 54%, and Selkis believes it will reach at least 60%.

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Among factors supporting the cryptocurrency’s rise, he cited investor-friendly changes in U.S. accounting rules, the emergence of new large holders of reserves in digital gold, and possible approval of spot Bitcoin-ETF.

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The April halving has historically preceded Bitcoin’s rally, the analyst noted.

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What crypto investors should watch for

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Most other assets, both in the crypto industry and traditional markets, are likely to lag Bitcoin in profitability in 2024, according to Selkis.

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“DeFi faces persistent regulatory headwinds that will restrain growth in the near term. NFT activity is largely dead. Other promising sectors (stablecoins, gaming, decentralised social media, infrastructure, etc.) are more likely to grow slowly and steadily, but not sharply or suddenly,” the analyst said.

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Regarding Ethereum, Selkis noted that major technological achievements in the form of the The Merge upgrade and the subsequent hard fork Shapella did not lead to a meaningful rise for the cryptocurrency. The price of the competing Solana token has risen sixfold since the start of the year, for example.

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Pressure on Ethereum could also push liquidity into Layer-2 solutions on the network.

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Nevertheless, the expert believes that the second-largest cryptocurrency will still continue a modest rise and represents a sound investment.

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In recent years, many crypto projects have locked up large portions of their tokens with varying vesting schedules. An increase in the circulating supply of such assets during unlock events could weigh on their prices, the analyst warned.

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On DeFi, Selkis noted that in 2023 trading activity in the segment remained largely flat. Rare spikes were tied to meme coins rather than breakthrough projects or broader adoption. The sector, facing regulatory tightening, is unlikely to show substantial growth, the analyst said.

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Selkis sees promise in certain non-financial directions of decentralisation such as DePIN, DeSoc and DeSci. In the near term, such projects are unlikely to scale to the volumes of their traditional counterparts, but even a modest expansion of their market share would mean a meaningful influx of funds.

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For example, DePIN platforms that provide cloud infrastructure currently account for 0.1% of a $5 trillion market. A rise in demand for decentralised services as insurance to as much as 1% would lead to a tenfold increase in the segment, the analyst said.

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The social networks landscape shows a similar picture, where traditional players posted profits of $230 billion in 2023 (half of which came from Meta’s products). Some DeSoc apps like Farcaster, friend.tech and Lens have already shown a decent start. The sector may repeat the DeFi boom of three years ago, Selkis believes.

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CryptoQuant analysts have suggested that Bitcoin could rise above $50,000 as early as the start of 2024.

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