This year has been pivotal for Bitcoin, the world's leading cryptocurrency. One of the key milestones was the approval of Bitcoin spot ETFs by the US Securities and Exchange Commission. In April 2024, Bitcoin also experienced a halving event, which is typically seen as a positive development for the digital asset. This year, the cryptocurrency is up 57%, and analysts remain optimistic about its future. However, they highlight four key factors that could influence Bitcoin's trajectory, both for better and for worse
Central bank policies
Experts point to the broad range of monetary easing cycles by global regulators as a key driving factor behind Bitcoin’s rally. Typically, central bank easing leads to an increase in the value of risk assets such as cryptocurrencies. Thus, a significant interest rate cut by the US Federal Reserve in September 2024 led to a rally in the price of Bitcoin. According to analysts, a broader global trend of monetary easing should solidify this growth trend. Preliminary forecasts suggest that continued monetary easing will likely contribute to Bitcoin's upside potential.
Regulatory uncertainty
A tough regulatory approach could pose a significant challenge for most cryptocurrencies, including Bitcoin. According to Matt Hougan, chief investment officer at Bitwise Asset Management, the worst-case scenario for BTC would be continued uncertainty around regulation and legislation. The US presidential election could add further fuel to the fire. Investors can only speculate on what the Trump administration would do, he said, adding that promises are not always kept, and the outcome could be disappointing. Nevertheless, he believes that the first cryptocurrency is relatively safe with regulators after the approval of BTC spot ETFs.
US presidential election
The US presidential election drew significant attention from both crypto and traditional investors. Markets were closely watching the race between Donald Trump and Kamala Harris. Both candidates were considered crypto-friendly, but Trump's stance was more clearly defined than Harris'. The Republican has publicly supported the digital asset market, participating in events and launching his own NFTs. This led many market participants to believe that Trump could support a rally in the cryptocurrency market. As a result, Bitcoin saw substantial gains as early polls showed Trump's chances of victory rising. Jeff Kendrick, an analyst at Standard Chartered, predicted that Trump’s win could send Bitcoin’s price soaring to $125,000 by the end of 2024. In the event of a Harris victory, Bitcoin was still expected to rise. Preliminary forecasts suggested that a Trump victory would act as a catalyst for growth in the digital currency market. In the long term, Bitcoin was projected to thrive regardless of the election outcome, with analysts noting its uncertain future after this pivotal event.
Future of Bitcoin spot ETFs
Experts believe that spot ETFs are likely to gain momentum in the near future, which bodes well for Bitcoin. Recall that in early 2024, Bitcoin spot ETFs saw significant gains. Moreover, they are expected to continue to have a positive impact on the leading cryptocurrency. This trend could persist into 2025. According to analysts, the growing popularity of Bitcoin ETFs, supported by firms such as BlackRock, could help Bitcoin maintain its leadership position in the crypto space.