The stars are aligning for something big in the weeks and months ahead.
Q3 is wrapping up, and many crypto enthusiasts are gearing up for what should be a volatile and profitable period for this asset class.
Today, we’ll cover several bullish factors that should propel BTC to break through its all-time high of ~ $73K and eclipse $100K, benefitting altcoins in the process.
Let’s begin.
Bullish signals for Bitcoin and the wider crypto market
US interest rate cuts
Bitcoin has surged past $60K again, this time following the US Federal Reserve’s decision to cut interest rates last month.
The 50 bp (0.5%) reduction represents the first drop in four and a half years, and many economists are banking on at least one more rate cut by the end of this year.
If interest rates drop further, many people expect this to significantly boost liquidity in the crypto market, with numerous altcoins benefitting from a major price pump.
Several markets globally are following suit and their central banks are also cutting interest rates to stimulate their economies.
The 2024 Bitcoin Halving has come and gone
History doesn’t always repeat itself, but it often rhymes.
Based on the first three halvings (2012, 2016, and 2020), the BTC price tends to pump — usually more than triple — its pre-halving price.
In reality, Bitcoin will experience diminishing rates of return and is unlikely to emulate the explosive ROI it generated before 2016. Nonetheless, many are still banking on outperforming (tech) stocks, gold, and other asset classes in the long term, not just in the next 12–15 months.
Bitcoin Block Reward Halving Countdown
website. Click on
for the full-screen version.
FTX creditors begin $14 billion of repayments, starting in October
While this announcement marks a step forward in dealing with the FTX saga, it could also be a double-edged sword.
Determining what creditors will do with reimbursed funds and what percentage of the BTC/crypto will be sold on exchanges is difficult.
Crypto news sources claim between $12.7 billion and $16 billion will be returned to creditors. However, there’s an ongoing controversy over refund calculations.
For example, on 11 November 2022, FTX filed for Chapter 11 bankruptcy; 1 BTC was worth $17,000.
Fast forward about two years, and BTC has nearly quadrupled that figure, currently sitting at ~$65,000.
As a result, those waiting on refunds from FTX will most likely receive up to 25% of BTC’s current value back.
Remember that the exact figure varies depending on the dates used to calculate price snapshots and the digital assets involved.
This is a raw deal for those who have been left in limbo for nearly two years waiting for compensation due to the gross incompetence of Sam Bankman-Fried and others behind FTX and Alameda Research.
FTX Token (FTT), the native token of the now-defunct exchange, shot up in price within 24 hours of this announcement.
N.B. I’d refrain from interacting with FTT as it no longer has proper utility. Moreover, in November 2022, someone transferred ~195.8 million FTT ($450.5 million at current prices) to an unknown wallet address, more than half of FTT’s max supply.
Following this event, crypto data aggregator CoinGecko provided this warning (which still appears on its website):
“FTX token Contract Deployer has transferred out the entirety of supposedly locked FTT tokens into circulation. Proceed with caution.”
Donald Trump and crypto
Several pro-crypto commentators and institutions, such as Andreessen Horowitz (a16z), Jesse Powell (Kraken Co-Founder and Chairman), Cameron & Tyler Winklevoss and Ryan Selkis (Messari CEO), endorse Trump for appearing to have a friendlier stance on crypto, let alone other emerging technologies.
Before continuing, I maintain a non-partisan stance on this election, as Bitcoin/crypto represents one of several pieces of the political puzzle influencing a nation’s trajectory, daily operations and international relations. Moreover, I live thousands of miles from the USA without first-hand exposure to its politics.
Ethereum co-creator Vitalik Buterin also weighed in on choosing a candidate based on their crypto stance. Here is an excerpt from a July 2024 blog post on Buterin’s official website:
“If you see a politician being crypto-friendly, one thing you can do is look up their views on crypto itself five years ago. Similarly, look up their views on related topics such as encrypted messaging five years ago…This can be a good guide on what kinds of changes to their views might happen five years in the future.”
It’s important to remember the difference between a politician who was sceptical of crypto until 2019 (due to it being a fairly new technology with limited commercial interest) and one who aggressively attacked (and still targets) the asset class, such as Senator Elizabeth Warren.
Time released a piece covering how pivotal this election issue is for certain voters, particularly those who have made life-changing gains from a legal, regulated crypto industry in the US. The piece also covers Trump’s 180-degree turn on crypto in recent years after once labelling it “a scam.”
Bankrate also published an article titled ‘Election 2024: Where Trump and Harris stand on crypto.’
It’s also worth noting that other wealthy investors are backing Democrats instead of Trump; more information is available here.
CZ is now a free man
Changpeng Zhao (a.k.a., CZ), co-founder and former CEO of Binance, was released from a halfway house last Friday, following three months behind bars (until August) in Lompoc II, a low-security prison in California.
He remains a notable figure in crypto. This Yahoo Finance article listed CZ as one of the four most influential people in crypto in 2023.
gm, the food taste so good… And what a luxury to be able to have more than one piece of fruit per day!
I know some of you may have a lot of questions. I won't have all the answers.
Let me chill for a bit. Then figure out the next steps. There are always more opportunities in… https://t.co/9hvgp8Bo97
— CZ 🔶 BNB (@cz_binance) September 29, 2024
From a news standpoint, the Binance and CZ trial has come and gone, and the case has now been resolved with the US SEC. There are no more doubts and speculation surrounding this, so we can all move on from it and focus on other matters in this sector.
Playing devil’s advocate — Bearish scenarios
US-China tensions, Russo-Ukraine and Middle Eastern wars, gargantuan US public debt
There is increasing friction between the established and aspirational superpowers, especially with China’s ambitions to dominate tech and other highly value-added industries as it moves away from low-end manufacturing.
This isn’t a geopolitics channel, and I am no expert. I’d recommend Peter Zeihan as a starting point, but I digress.
How does this all relate to crypto?
For starters, global events do have a major impact on prices across this asset class.
Major restrictions on BTC mining and crypto trading in China, COVID-19, monetary policies (notably interest rates in the USA), conflicts and headlines about recessions — or even another depression — are some of the events that have held back Bitcoin and altcoins.
On the flip side, one could argue this buys us even more time to snap up these digital assets whilst they’re still (relatively) cheap, at least based on where many people expect them to go, i.e., $1 million BTC and $40,000 per ETH by 2030.
The situations in Ukraine and through parts of the Middle East add to global tensions, with the risk that things could get out of hand.
Furthermore, there’s the looming issue of rapidly growing sovereign debt worldwide (the US’ gargantuan $35 trillion+ situation being the most high-profile example), but that’s an entirely different topic of discussion.
Additional thoughts
The pessimism surrounding corrupt and incompetent exchanges can only last so long before news about more major partnerships, institutional involvement via ETFs, tech innovations and announcements covering the use of BTC as legal tender all take hold and dominate the crypto news cycle.
Despite all the attacks on Bitcoin and the broader crypto sphere — with the former being labelled “dead” at least 380 times to date — the foundation blockchain’s fundamentals, such as hash rate (i.e., network security), BTC’s controlled inflation rate, number of active wallets, etc., continue improving.
Ongoing improvements to Ethereum (and scalability courtesy of L2s), cross-chain interoperability, industry-wide regulations and the continuous growth of identity-verified crypto users demonstrate this industry is far from over.
Rather, it’s just getting started, so brace yourselves for a wide ride ahead.
Disclaimers
• N.B. None of this is financial advice; I am not a financial advisor. You are ultimately responsible for crypto investments, let alone in any asset class.
• The opinions expressed within this piece are my own and might not reflect those behind any news outlet, person, organisation, or otherwise listed here.
• Please do your own research before investing in any crypto assets, staking, NFTs or other products affiliated with this space.
• Bitcoin (BTC) accounts for about 20% of my crypto portfolio at the time of writing.
Featured Image by darkronstudio at Freepik (Base model: Midjourney 6).