In this Article
Have been following the recent Crypto Bull Run? In this article, Max Frilot provides a brief but well-rounded explanation of the bull market together with expert advice and predictions of what that means for the future of cryptocurrencies and crypto markets.
What is a ‘Bull Run’?
Crypto Bull Run
To provide initial context, it is important to first define the primary concept. A bull market may be regarded as a period where prices across a particular market, such as stocks or cryptocurrencies, are generally rising. This upward trend typically stems from investor optimism, positive economic indicators, and increasing demand for assets. In a bull market, investors have confidence in the market’s future growth prospects, leading to higher trading volumes and overall positive sentiment.
A bull run is a subset of a bull market. It refers to a particularly intense and prolonged period of rising prices. During a bull run, asset prices experience rapid and significant appreciation, often fuelled by factors such as favourable news, technological advancements, or increased adoption of a particular asset class. Bull runs can attract many investors seeking to capitalise on the upward momentum, leading to further price increases and a self-reinforcing cycle of positive sentiment.
The Bitcoin Bull Run
Crypto Bull Run
The journey of Bitcoin has been nothing short of remarkable. From its humble beginnings, where it was traded for fractions of a cent, Bitcoin’s price has witnessed astronomical growth over the years. In 2021, Bitcoin reached its all-time high, surpassing $60,000 per coin, cementing its status as a legitimate asset class, and attracting widespread institutional interest.
This year, the leading cryptxocurrency by market value has surged by 70%, reaching unprecedented highs surpassing $72,000. This surge continues the momentum from last year’s remarkable 155% increase, which occurred after enduring a challenging bear market.
The broader cryptocurrency market has also experienced exponential growth alongside Bitcoin, with thousands of digital assets now available for trading. Ethereum, the second-largest cryptocurrency by market cap, has emerged as a formidable competitor to Bitcoin, offering a platform for decentralised applications and smart contracts.
Data and statistics further underscore the cryptocurrency market’s rapid expansion. According to CoinMarketCap, the total market capitalisation of cryptocurrencies recently surpassed $3 trillion, a staggering milestone that reflects the market’s maturation and growing mainstream acceptance. Daily trading volumes in the cryptocurrency market routinely exceed hundreds of billions of dollars, demonstrating the liquidity and depth of the market.
Looking ahead, the future of Bitcoin and the broader cryptocurrency market remains bright. With ongoing technological innovation, regulatory developments, and increasing institutional participation, the stage is set for further growth and evolution. While challenges and uncertainties undoubtedly lie ahead, the underlying fundamentals of Bitcoin and its transformative potential continue to inspire confidence and enthusiasm among believers and enthusiasts worldwide.
The Halving Event and Ethereum 2.0
Crypto Bull Run
In less than 8 weeks, the Bitcoin network will witness a major event. As many of us anticipate, its fourth halving is scheduled for April 15, 2024. This will cut the reward given to miners for each validated block by half, from 6.25 BTC to 3.125 BTC. The halving is Bitcoin’s key mechanism designed to control inflation by limiting the supply of new Bitcoins.
Historically, halvings have played a significant role in enhancing Bitcoin’s scarcity and potentially impacting its price dynamics. The Stock-to-Flow model suggests that this scarcity could lead to a significant increase in price, with highly optimistic forecasts projecting prices up to $450,000 after this halving.
The 2024 halving presents a dual challenge for the Bitcoin mining ecosystem. While it may test the profitability of less efficient mining companies, it could also mark the beginning of a new era for Bitcoin, especially with the emergence of Bitcoin Spot exchange-traded funds (ETFs) that facilitate access for institutional investors to the market.
Furthermore, Ethereum 2.0 represents a transformative upgrade aimed at making the blockchain more scalable, efficient, and future-ready through a transition to a proof-of-stake (PoS) consensus mechanism. This upgrade solidifies Ethereum’s standing against its competitors, paving the way for a more sustainable and scalable blockchain infrastructure.
Some analysts argue that Ethereum 2.0 will be an even greater catalyst for the crypto market than Bitcoin’s halving event. Surely, we can project the attraction of more investors to the Ethereum ecosystem.
We expect this upgrade to unlock new use cases and applications for decentralised finance (DeFi), non-fungible tokens (NFTs), and other innovative projects built on the Ethereum blockchain. Moreover, this transformation is likely to position Ethereum as a key player in the evolving crypto landscape and drive further adoption and investment in the platform.
Bitcoin ETF Approval
Crypto Bull Run
The recent approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) has significant implications for the cryptocurrency market. In fact, this approval allows investors to gain exposure to Bitcoin through conventional brokerage accounts. It turn, this makes it easier for both retail and institutional investors to invest in the digital asset.
We expect Bitcoin’s approval of spot ETFs to attract institutional investors who were previously cautious due to regulatory concerns. This increased institutional interest could lead to higher liquidity and more stability in the market, potentially impacting the globe. Institutional investors bring substantial capital and resources to the market, which can contribute to the growth and stability of the cryptocurrency sector.
Additionally, the legitimisation of crypto investment through regulated spot ETFs could attract a diverse investor base, encouraging increased capital flows across various cryptocurrencies. This broader investor base may contribute to market growth and stability, as more investors recognise the potential of digital assets. Increasingly, investors will allocate larger portions of their portfolios to cryptocurrencies.
Spot Bitcoin EFTs
The approval of spot Bitcoin ETFs marks a significant milestone in integrating cryptocurrencies into mainstream investment portfolios. It provides a credible stamp of approval for large institutions and market participants, changing the perception of Bitcoin as a legitimate asset class. This development could lead to further mainstream adoption of cryptocurrencies, as investors become more comfortable with digital assets and their potential for long-term growth.
Moreover, spot Bitcoin ETFs’ approval is expected to influence Bitcoin’s market dynamics significantly. It creates new avenues for investors to gain exposure to Bitcoin, potentially leading to increased investment and interest in the cryptocurrency sector. As a result, this increased demand could potentially drive up the price of Bitcoin and other cryptocurrencies, as more investors enter the market seeking exposure to digital assets.
Positive developments in the US crypto space often have a ripple effect on global market sentiment. Regulators worldwide may adjust their policies or approach towards crypto-related financial products following the SEC’s approval, boosting confidence among investors globally. This could lead to a more favourable regulatory environment for cryptocurrencies, encouraging further investment and wider adoption.
Experts predict that spot Bitcoin ETFs’ approval could bring long-term value creation in the crypto space. Whilst we envisage these ETFs to produce significant inflows, potentially reaching up to billions of dollars in the first year, they could also impact the overall cryptocurrency market positively. This influx of capital could lead to increased investment in the sector, potentially driving innovation and development of new technologies and applications.
Conclusion: What does the Future Hold?
Crypto Bull Run
The recent surge in Bitcoin’s price and the broader cryptocurrency market’s growth reflects a period of sustained optimism and upward momentum. With ongoing technological advancements, regulatory developments, and increasing institutional participation, the market is poised for further evolution.
The approval of spot Bitcoin ETFs by the SEC is a significant milestone, providing regulated access to Bitcoin for investors. This approval is expected to increase liquidity and market stability, attracting a broader investor base.
Conclusively, we anticipate upcoming events such as Bitcoin’s halving and the launch of Ethereum 2.0 to drive further adoption and investment in the cryptocurrency space. Overall, while challenges may arise, the underlying fundamentals of Bitcoin and Ethereum continue to inspire confidence and enthusiasm, positioning the cryptocurrency market for continued growth and innovation.We also offer an array of services in complementing industries and sectors. Contact us for more information.
More about MK Fintech Partners Ltd.
Michael Kyprianou Fintech Partners Ltd is a Maltese licensed VFA Agent (virtual financial assets agent). It comprises a team of dedicated experts who provide services such as advisory, licensing and registrations of activities related to Fintech, Crypto, Blockchain, Investment, company incorporations and banking. and other ancillary services. MK Fintech Partners forms part of the Michael Kyprianou Group, a top tier international legal and advisory firm. It has established an enviable reputation as a broad-based legal practice over the years. Mainly by keeping at heart its principle to always exceed its clients’ expectations. MK has grown to become one of the largest law firms in Cyprus with offices in Nicosia, Limassol and Paphos. The MK Group’s international presence also includes fully-fledged offices in Greece (Athens and Thessaloniki), Malta (Birkirkara), Ukraine (Kiev), the United Arab Emirates (Dubai), United Kingdom (London), Israel (Tel Aviv), and Germany (Frankfurt).
The content of this article is valid at the date of its first publication. It intends to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on a specific matter before acting on any information you read. For further information, contact us at MK Fintech Partners via email at contactmkfintech@kyprianou.com or by telephone +356 2016 1010.
