After hitting historical highs, the total cryptocurrency market shrank by $1.4 trillion in 2022, leading to widespread pessimism.
In a show of resilience, the market started recovering in 2023. Bitcoin went from $16k to $42k, rising 162% in value. Meanwhile, Ether almost doubled in value from $1.2k to $2.2k. For context, NASDAQ’s gains were 44%, S&P 500’s 18%, and gold’s only 12%.
Optimism and belief now dominate the crypto industry, and many are tipping 2024 as the year crypto reaches new all-time highs. In this article, I’ll go over 13 reasons why crypto enthusiasts expect a new bull market this year.
⚠️ Financial Advice Disclaimer: The information presented in this blog post is for educational and informational purposes only. It does not constitute financial advice, and you should not make investment decisions based solely on the content provided. Always conduct your own research and consider consulting with a qualified financial advisor before making any investment choices. Past performance is not indicative of future results, and there is a risk of financial loss. The author and website do not assume any responsibility for actions taken by readers based on the information herein.
⚠️ Please, read the full financial advice disclaimer at the end of this article.
1. The Crypto Crooks Are All in Jail
2023 saw a flurry of high-profile arrests for crypto scams and fraud.
Most notably, Sam Bankman-Fried (SBF), the co-founder of FTX, was convicted on seven counts of fraud and conspiracy.
SBF and his executives defrauded investors of billions of dollars by diverting FTX customers’ funds to their crypto trading firm, Alameda Research. He faces up to 110 years in jail.
Here are some other high-profile cases that took place in 2023:
- Avi Eisenberg was accused of commodities manipulation and wire fraud for deploying a fraudulent trading strategy against Mango Markets, a Solana-based decentralized exchange (DEX).
- Do Kwon, founder of Terra, was charged with orchestrating a multi-billion dollar securities fraud for misleading investors about the stability of TerraUSD.
- Richard Heart and three of his crypto entities — Hex, PulseChain, and PulseX — were charged with conducting unregistered offerings of crypto asset securities. He was also charged with fraud for spending invertors’ funds.
- Justin Sun, founder of Tron, was charged by the SEC for engaging in market manipulation and the unregistered offer and sale of securities.
- Alex Mashinsky, founder and former CEO of the cryptocurrency lender Celsius Network, was charged with seven criminal counts, including securities fraud, commodities fraud, and wire fraud.
The industry is much cleaner now, paving the way to slowly earn back the trust of mainstream users.
2. Blockchain Infrastructure Is Becoming More Scalable
In 2023, Ethereum completed the Merge, upgrading from proof-of-work (PoW) to proof-of-stake (PoS). This has made the network much more scalable — but it’s not enough.
To further increase scalability, developers have built several on-chain and off-chain scalability solutions, including:
- Sidechains (e.g., Gnosis Chain)
- State channels (e.g., Raiden Network)
- Optimistic rollups (e.g., Optimism)
- Zero-knowledge (ZK) rollups (e.g., zkSync)
- Validium chains and shards (e.g., the zkPorter root)
All these are basically secondary chains built on top of Ethereum and connected to it by interoperability protocols and bridges (which are getting better and safer, too).
Many of these projects have been live and growing in usage for a long time. This has allowed the technology to mature and improve. In addition, projects like Optimism have released tools to make it easier to develop new scaling solutions.
Two projects I’m particularly excited about are Zircuit — a game-changing EVM-compatible ZK-rollup launched this year — and LayerZero — an omnichain messaging protocol that just rolled out v2.
If a developer isn’t satisfied with a chain’s scalability, they can easily build on a more scalable one or even launch an app-specific chain at a low cost, while still benefiting from Ethereum’s security guarantees.
For users, more scalability means faster transaction processing, lower fees, and improved user experience (UX), which are all crucial for mainstream adoption.
3. Blockchain Innovation Is Accelerating
Blockchain (like any other technology) started off slow and dealt with initial resistance. Now, it has gained momentum and is starting to pick up speed.
The technology has matured and several solutions that make it easier to create and innovate were launched. For example, ZK rollups add privacy to the blockchain and are very secure and scalable, but they’re notoriously complex to implement.
Thanks to the unprecedented work of various projects, ZK-proofs are now widely adopted, taking the crown as the biggest trend in the blockchain industry in 2023.
And, according to Cryptomeria Capital’s Zero Knowledge Report, in 2024, they’re “poised to redefine security and privacy paradigms, offering unparalleled solutions to emerging challenges.”
This is just one example. Several other innovations keep popping up, paving the way for widespread adoption.
4. The Web3 Developer Community Is Alive and Kicking
Despite the bear market, the Web3 developer community is still alive and kicking. This is one of the most important factors contributing to a possible bull market in 2024 — the developer community is Web3’s greatest asset, after all.
Everything blockchain and crypto is built by developers. Having a vibrant community is crucial to keep the ball rolling.
I’ve been listening to Leonardo Sousa’s podcast, “Messing with Web3,” and the developer conference he attended was full of energy.
Besides, if you follow sources like CoinDesk and Cointelegraph you’ll see new projects or updates to established projects popping up daily.
In the words of Eat the Blocks founder, Julien, “Builders are more optimistic than ever and this is a very important sign.”
5. We’ve Seen Major Improvements in Developer Tooling
As mentioned, we’ve seen major improvements in developer tooling in 2023. Notable examples include:
- Modern smart contract frameworks like Foundry
- Blockchain APIs like QuickNode
- Leading rollup development frameworks, such as Optimism’s Bedrock.
It’s becoming increasingly easy and quick to build blockchain applications. This promotes innovation, attracts more developers, boosts interoperability, and contributes to cost efficiency.
6. Smart Contract Security Is Growing Fast
The crypto world has been dealing with hacks since the beginning, especially with smart contracts. Hackers have taken billions from DeFi projects, but the community is fighting back, and the field of smart contract security is growing fast.
Nowadays, there’s a lively community of smart contract auditors making good money to check for security issues. It used to be only big firms doing this, but now we’re seeing more solo auditors, thanks to crypto bug bounty platforms like Immunefi and HackenProof.
With so many eyes looking for problems, the future of crypto is expected to be way safer. This is a key step to earn the trust of Web2 businesses and users.
7. User Experience Keeps Improving
Security is very important, but it’s not enough. User experience (UX) is another critical driver for adoption and engagement.
Users don’t want to put in the effort to understand concepts like cross-chain compatibility and cryptographic keys — effective design simplifies usage.
Conversely, poor UX leads to costly mistakes like losing tokens, and increases the need for user support, leading to user loss and low engagement.
In addition, well-designed platforms are key to building trust, especially considering the anonymous nature of blockchain transactions.
As the blockchain space gets populated, good UX can be a crucial differentiator, attracting and retaining more users. Similarly, blockchain solutions can only compete with existing services, such as finance, social media, and supply management apps, with seamless UX and a familiar interface.
The UX of dapps used to be terrible, but it has (thankfully) come a long way. For example, crypto wallets now offer a much smoother experience, making it easier for non-techies to participate in Web3.
Another example is Immutable’s “Passport.” It allows users to log in to games via a single sign-on process rather than by connecting their wallets.
This abstracts blockchain interaction, making logging in more familiar. This increased simplicity could allow a blockchain-based game to be a mainstream hit for the first time.
8. The Blockchain User Base Is Growing (Modestly)
Adoption is a crucial metric; after all, the purpose of building crypto infrastructure is to support the development of dapps and a substantial number of users.
Better security, improved user experience, and lower fees should attract a larger user base. However, despite some progress, adoption is still somewhat low.
While this is my weakest argument for a potential crypto bull market in 2024, there’s been some progress. Notably, this year, we’ve seen traction in decentralized social media platforms like Lens.
Besides, the landscape of Web3 games is super dynamic, with numerous new games being released and a few major ones in progress.
According to VanEck’s 2024 crypto predictions, “blockchain gaming will see at least one title surpass 1 million+ daily active users” this year, with the most likely candidates being the games IMX and Immutable are launching in 2024.
9. TradFi and Fintech Are Onboarding the Crypto Train (Tchoo, Tchoo!)
The most notable example of a fintech company embracing crypto is PayPal. It holds a 42% share of the online payment market and has allowed merchants to accept crypto payments since October 2020.
In August 2023, PayPal made its second move into the crypto space by launching its own stablecoin. It also introduced a crypto wire feature, enabling users to buy and sell cryptocurrencies.
Considering PayPal is the preferred payment method for most online merchants and a pivotal player in the eCommerce landscape, this development is monumental.
PayPal embracing crypto opens up new possibilities and opportunities for the broader adoption of digital currencies in online transactions by increasing accessibility, credibility, liquidity, and mainstream awareness.
Besides, the involvement of a major player may encourage regulators to develop clearer and more favorable regulations for the crypto industry, potentially fostering a bullish market sentiment.
10. Interest Rate Cuts Are on the Horizon
This is the most important reason of all. You see, cryptocurrency is correlated to the stock market, which is heavily influenced by interest rates.
Central banks have been raising interest rates since late 2021 to tame inflation. According to Reuters, most major developed economies have now decided to put a stop to aggressive rate hikes since inflation has cooled down throughout 2023.
To ensure a soft landing rather than a recession, some Fed officials believe slashing interest rates will be in the cards next year. In fact, they expect 75 basis points of rate reductions throughout 2024. The European Central Bank is also likely to begin cutting rates as early as June 2024.
Business Insider has also backed these forecasts putting forward that “economists at Bank of America forecast 152 interest rate cuts from global central banks in 2024.”
Meanwhile, JPMorgan’s Phil Camporeale told CNBC that “it’s not just the Fed that’s pausing and maybe easing. I think a lot of the G4 central banks are in this mood to just make things a little bit easier.”
When interest rates decrease, more capital becomes available, leading to a flourishing stock market. This positive correlation extends to the crypto market, potentially triggering a new bull market.
11. We’re Already Witnessing a Bullish Trend in the Crypto Market
In 2023, Bitcoin, Ethereum, and several altcoins rose in value.
The NFT market is also starting to recover. According to Coin Market Cap, “November saw a notable surge in NFT trading volume, nearing the $1 billion mark.” In addition to an increase in volume, the average transaction value of NFTs grew by 114%.
These are very positive signs, but can this bullish trend be temporary?
Well, it can. However, we haven’t seen these gains in a long time and several other factors (listed in this article) strengthen the case for a 2024 bull market. WAGMI.
12. Crypto ETFs Are Coming
Experts have been talking about crypto ETFs for years, but they might actually become a reality this time.
BlackRock has officially filed for an Ethereum ETF and a Bitcoin ETF. Of course, the SEC is trying to get in the way, but, as the world’s largest asset manager, BlockRock actually stands a chance of winning against the SEC.
Why is this so significant, though?
This is significant because it has the potential to open the floodgates. You see, a substantial amount of boomer money is tied up in pension funds, which are restricted to investing in stocks.
A cryptocurrency ETF is technically a stock, even if the money ends up in crypto assets. Once crypto ETFs get the green light, pension funds will be able to diversify into the cryptocurrency market.
To put it in perspective, at the time of writing, the entire crypto market is valued at $1.64 trillion, while an estimated $60.6 trillion was invested in pension funds as of 2021. The approval of crypto ETFs could trigger a massive inflow of capital into the cryptocurrency market.
13. The Fourth Bitcoin Halving Is Expected to Happen in April
Halving is a programmed Bitcoin feature that happens every 210,000 blocks, or roughly every four years. The next halving is expected to happen in April 2024 when the block height reaches 840,000.
Bitcoin halving reduces mining rewards by half, limits new Bitcoin creation, and curbs inflation, increasing the value of existing coins. This has historically triggered a new bull market.
Is a Crypto Bull Market Really Coming in 2024?
While institutional adoption of crypto may not be what early blockchain enthusiasts envisioned, it has the potential to propel the technology into the mainstream and drive new record highs in the crypto market.
Personally, I’m bullish on crypto. I’ll invest in Bitcoin (and maybe Solana) for the first time, and continue exploring crypto and blockchain.
In 2024, I’m looking forward to getting more involved in the world of Web3, both personally and professionally.
Still, remember that no one can predict the future, and past performance isn’t indicative of future results — please, read the full financial advice disclaimer below.
FAQs
When Is The Next Crypto Bull Market?
While there’s strong evidence pointing to a potential crypto bull market in 2024, the timing is uncertain and influenced by market dynamics. It depends on factors like investor sentiment, regulatory developments, and technological advancements.
What Is a Bull Run in Crypto?
A bull run in crypto refers to a period of rising prices across the cryptocurrency market. It signifies increased optimism, with investors buying and holding assets, anticipating continued upward momentum. Bull runs are characterized by positive market sentiment and heightened trading activity.
⚠️ Financial Advice Disclaimer
The information provided in this blog post is for educational and informational purposes only. It is not intended as financial advice, and you should not consider it as such. The content is based on the author’s opinion and research, and market conditions may change.
Before making any investment decisions, you should conduct thorough research and, if necessary, consult with a qualified financial advisor. Past performance is not indicative of future results, and there is no guarantee that the predictions in this blog post will materialize or be suitable for your individual circumstances.
Investing in cryptocurrencies and financial markets involves risk, and you should be aware of the potential for both gains and losses. Always do your due diligence and carefully consider your risk tolerance before making any investment decisions.
The author and the website are not responsible for any actions you take based on the information provided in this blog post. You are solely responsible for your own financial decisions, and the author and website disclaim any liability for any financial loss or damage incurred as a result of the use of information from this blog post.
