Some political unrest and geopolitical factors around the world also enhanced the rise in the price of Bitcoin in particular, which recorded record highs exceeding 100 percent (but has not yet reached peak levels), which analysts attributed to technical and economic effects, in addition to the impact of recent geopolitical tensions, for its price to exceed Forty thousand dollars.
Bitcoin’s price reached its highest level ever at about $69,000 in November 2021, and since then the currency has lost about 60 percent of its value.
Regarding what awaits the cryptocurrency market in the new world in 2024, amid a state of uncertainty prevailing about the future of the interest rate in the United States of America, and also increasing uncertainty in the market, in addition to talk about intensifying the regulation process, specialists spoke in separate statements to the “Sky News” website. Arabic, about the factors that determine future market trends, and the expected impact of intensifying the regulatory process on the development of the market.
Global situations
Senior financial markets analyst at Equity Group, Ahmed Azzam, said in exclusive statements to the “Eqtisad Sky News Arabia” website that digital currencies benefited greatly from the conditions witnessed by the global economy in the year 2023, especially the second half of the year, which makes there the possibility of recording… More increases in 2024, due to the following reasons:
- High appetite for risk and high demand for risk instruments such as digital currencies, due to news about reducing interest rates in major economies at the beginning of 2024.
- News circulated regarding the Securities Supervisory Commission (SEC) of the American Stock Exchange accepting the idea of Bitcoin ETFs and ETFs.
- Expectations that the Securities and Exchange Commission will approve a group of index funds in 2024, which has prompted many major investment companies and funds, such as the American company “BlackRock,” to submit larger requests for digital currencies, led by Bitcoin, which heralds a rise in prices after the price reached… Bitcoin reached nearly 45 thousand dollars.
- With the official reliance on ETFs, it is expected that the digital currency market will be further affected, as there are approximately eight funds that have applied to create an exchange-traded fund.
- Reducing interest rates. The lower the interest, the higher the trend towards risk instruments, led by digital currencies. Currently, the market value of digital currencies is approximately $1.8 trillion, and in 2024 we may witness a greater rise that may reach more than $2 trillion in market value.
- Halving the mining reward will reduce the supply of Bitcoin by half, which will lead to a positive price momentum for Bitcoin trading in 2024.
- The rise of Bitcoin, reaching approximately $45,000, and the presence of alternative currencies at low levels, may represent a positive opportunity for low-priced digital currencies to record increases in the coming period, as it is known that Bitcoin is the leader of the herd for digital currencies, and recording increases may push alternative currencies to record increases. Next period.
Factors affecting the performance of cryptocurrencies
The CEO of VI Markets, Ahmed Moati, in his interview with the “Eqtisad Sky News Arabia” website, identified a number of main factors that affected the performance of cryptocurrencies during the year 2023, and caused their decline, the most important of which are:
- Many fraud operations have occurred through cryptocurrencies, which has led to their reputation being tarnished.
- More than one hacking occurred on cryptocurrency platforms
- Some platforms declared bankruptcy, the most famous of which was the largest platform, FTX, which was declared bankrupt.
- Cryptocurrency platforms exit and stop in some major countries due to tightening restrictions and move to other, less powerful markets.
- The rules and laws began to be tightened further in some countries, perhaps the most prominent of which is the United States of America, for example, which was in contrast to the year 2022.
He points out that there was intense optimism among traders in the crypto market after some countries legalized the situation and officially approved Bitcoin, and there was an expectation that other countries would follow suit, but what happened in 2023 was the opposite with an increase in rules and laws and the expected booms did not occur, so it was expected. The value of Bitcoin rose to one hundred thousand dollars during the year, but when it rose, it reached only 43 thousand dollars.
El Salvador was the first country in the world to legalize dealing in digital currencies in 2021. In 2022, it was followed by the Central African Republic, which is the first country on the African continent to adopt Bitcoin as an official currency.
According to Moati, it was known that crises had a major impact on cryptocurrencies with their value increasing and individuals turning to them, which is called “digital gold,” similar to the yellow metal “gold,” which is sought as a safe haven in times of crises, and the value of Bitcoin has indeed risen. , but it did not reach the highest value it had reached before.
Moati said that the geopolitical tensions and crises that the world is witnessing and that are imposing themselves on the global economy have made cryptocurrencies a safe haven for some to escape from these events, and he expects that if they continue, cryptocurrencies will witness a greater rise.
Regarding the future trends of cryptocurrencies in 2024, Moati explained that this year will be full of challenges in this field, but it will continue to rise, but it will not be as strong as the booms that were in 2020.
What about the year 2024?
He added that the rise or fall of cryptocurrencies during the new year is linked to two main factors:
- Monetary policy: If the US Federal Reserve reduces interest rates, this will have a positive impact on cryptocurrencies if stocks rise. If interest rates are reduced, money will leave banks and go to other destinations, including cryptocurrencies. However, if monetary policy continues to tighten, cryptocurrencies may decline.
- Rules and laws: If more restrictions and strict laws are issued, cryptocurrencies will decline, especially in the United States of America, while on the contrary, if there are facilities, currencies will rise. The rules will be a key player during 2024, whether by tightening or easing the laws.
2023-12-28 11:41:21
#Cryptocurrencies #develop #intensified #regulation
