Crypto Bull Run 2024/2025: What Will Drive It?
Nov. 07, 2023. 7 min. read.
Crypto Bull Run 2024: What's fueling the surge? From Bitcoin halving to AI integration and Ethereum's upgrades, discover the driving factors in our analysis.
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The 2021 Bull Run was incredible. Many first-time millionaires were created from the mix of innovation, economic stimulus, and – yes – a touch of speculation from investors stuck at home. The pandemic, which induced quantitative easing from the USA (aka money printing), and increased access to global trading platforms such as Coinbase and Binance, created a perfect storm for explosive crypto valuations.
Examining future crypto-narratives and pondering how they will influence the next cycle will best position you for the upcoming bull run. According to many experts, it is just beginning to form. Bitcoin has been off to a blistering start from the 1st of January 2023, then had a bit of a lull mid-year, before it breached $35,000 during October (‘Uptober’ in crypto parlance). This is consistent with the potential for a massive 2024.
Bear market fatigue can make the days of up-only growth seem like a distant dream, and make you feel that crypto will never enter a bull market again. However, the global financial system is constantly shifting capital, attention, and manpower, and many factors are aligning that mark crypto as the center of the bullseye.
Let’s examine these fast-approaching events and understand how they are indicating now is the time to prepare for the next virtual asset bull cycle.
Bitcoin halving (April 2024)
You’ve undoubtedly heard of Bitcoin halving and how it reduces the Bitcoin mined from each block by half. This causes miners to receive half of the previous reward, simultaneously reducing the inflow and incentivizing them to HODL until Bitcoin prices increase. This event is programmed to occur every four years until 2140, when the final Bitcoin is mined.
Regardless of what any Ethereum expert or memecoin trader may tell you, the Bitcoin price is the leading indicator of any market shift. If your favorite Telegram group refuses to believe this, take a look at the graphs below tracking crypto’s total market cap and Bitcoin dominance.
While the crypto market saw an increase of 25% in total market cap, Bitcoin dominance has increased by 5%, meaning Bitcoin has done some extremely heavy lifting. In an altcoin market, this trend would be reversed. Bitcoin trending up is a prerequisite for any bull market to begin, and observing price action as the halving next year gets closer will clue you into what we and the market are in store for.
Keep an eye out on Bitcoin’s price as we approach the next halving on 13 April 2024.
AI’s role in the next cryptocurrency narratives
The insane growth and interest in AI took a lot of shine and funding off crypto and poor old Web3. The blockchain industry responded, and has begun integrating the core features of artificial intelligence to enhance crypto-based platforms. Protocols already in the AI domain such as SingularityNET (AGIX), Render (RNDR) or Fetch AI (FET) are booming, with the correct assumption that crypto and AI are extremely complementary.
The metaverse narrative in particular stands to greatly benefit from features such as generative AI, cloud AI solutions, and other tailor-made to take advantage of the blockchain industry.
BlackRock Bitcoin Spot ETF
It’s easy to forget that just a few years ago, when everyone was in profit, mainstream adoption was considered inevitable. For this though, normies like grandma and grandpa would have to be able to own Bitcoin and crypto like a commodity stock without having to remember and safekeep their silly private key or recovery seed. This was thwarted by a variety of bad headlines coming from the crypto space, including the collapse of FTX, rampant scams, and yes, NFT ‘investing’.
BlackRock, one of the world’s largest asset managers with custody of over $9 trillion in assets, has been actively working to create a Bitcoin Spot ETF. Unlike many synthetic assets that simply mirror the price of Bitcoin, the BlackRock ETF would purchase and actively hold Bitcoin. This would offer direct exposure to BlackRock’s customers and likely mean millions of new digital asset investors.
The ETF, unfortunately, relies on approval from the Securities and Exchange Commission (SEC), which has an extensive record of being anti-crypto, but the BlackRock iShares Bitcoin Spot ETF’s chances of approval appears to be a shoo-in, according to most analysts, as are other ETFS from Fidelity, Ark and Grayscale. Its creation would act as a stamp of approval by the US government, and bring TradFi adoption to Bitcoin.
Ethereum rolls out ProtoDanksharding with EIP-4844
Ethereum has been the clear winner for decentralized platforms to conduct fast and secure data transactions. Its massive user base and influence make it the platform for Web3 and decentralized transactions, but there’s still one issue: it’s expensive.
Ethereum has been aware of this issue. In ProtoDanksharding (EIP-4844), on-chain data will be temporarily saved in so-called ‘data blobs’.
Since these data blobs expire in 1-3 months, rather than remaining permanently saved on Ethereum, they cost a fraction as much. Instead of the user paying to maintain the cost of storing this data, that responsibility falls on those using it, such as protocols, exchanges, or indexing services.
These data blobs are expected to be implemented in Q4 2023, followed by Danksharding to dramatically increase the transactions per second (TPS) of the network.
Increased TPS and layer-2 throughput would cement Ethereum as the ideal platform to conduct DeFi transactions, host dApps, and trade ERC-20 tokens without taking out a second mortgage on the family farm.
Improved macro conditions
Central bank interest rates have been steadily increasing since the end of the pandemic, causing investors rush to pile into safer investments, such as US Treasury Bonds, and driving down the value of risk-on assets, including cryptocurrencies.
The poor macro-economic environment is a global consequence of the quantitative easing, or stimulus spending, that occurred during the pandemic, and was quickly followed by inflation. The reverse of easing, quantitative tightening, is currently being wielded to increase interest rates and ring out the excess capital still in the economy to bring inflation back down.
However, governments will eventually have to decide when enough anti-inflation measures have been deployed, or else a recession will begin and further damage the economy. Preston Caldwell, senior economist of the MorningStar Research Services LLC, estimates that rates will begin to be cut in early 2024, claiming that this will be when inflation appears to be returning to the target of 2%.
Honorable Mention: U.S. Elections
There’s been some speculation that Satoshi Nakamoto timed his Halving cycle to coincide with the U.S. election cycle. Politicians are notoriously apprehensive to try anything economically risky that might hurt their voters’ pockets during an election year. With a growing percentage of the population now owning crypto, especially the younger demographic, cryptocurrency regulation will become a very hot issue next year. With candidates such as Robert F. Kennedy, Tulsi Gabbard and Vivek Rawasamy all throwing their weight behind Bitcoin at May’s flagship Bitcoin 2023 Miami conference, expect a muted response from regulators in 2024.
The previous cycle’s objectives were laser-focused on attaining mainstream adoption, onboarding newcomers to crypto and Web3, and demonstrating that digital assets offer substantial advantages to the global economy and traditional banking system.
This time round, a more sophisticated crypto sector, buoyed by the growth of Web3, will show that it’s expanding its reach to TradFi, as well as integrating new technology like AI to offer users leveled-up DeFi and NFT applications for use across the growing digital economy.