Raynor de Best
Content expert covering payments and (crypto)currencies
Crypto market - statistics & facts
The cryptocurrency market continued its rise in Q2 2024, after the U.S. SEC unexpectedly paved the way for Ethereum ETFs to be traded on major U.S. stock exchanges. This move follows only months after the SEC approved 11 Bitcoin spot ETFs in January 2024. The crypto market felt the influence of these 11 products right away: The investment inflow of BlackRock's iShares Bitcoin Trust (IBIT) ETF, for example, reached up to 17 billion U.S. dollars since launch. Could Ethereum ETFs fuel a cryptocurrency bull run in the second half of 2024? And what other trends can be observed?
Cryptocurrencies are a volatile investment product, with business use cases that are still early in development. As 2024 progresses, it is likely there will be plenty of catalysts ahead. For some, this may be an opportunity. For others, this could be a cause for concern.
Bitcoin and Ethereum have different purposes
Bitcoin and Ethereum are the two main cryptocurrencies by a significant margin. The two digital coins account for a combined 70 percent of the total cryptocurrency market capitalization. Each has its own design choices and goals, however. Bitcoin acts as a digital variant of gold. Therefore, some crypto enthusiasts hope Bitcoin can be used in payments - something for which Bitcoin's transaction speed is not high enough. Ethereum - with Ether as its cryptocurrency - is the biggest blockchain network behind decentralized applications, such as Decentralized Finance (DeFi), NFTs or other tokenized assets. This could mean investors will treat potential Ethereum ETFs differently than to Bitcoin ETFs.Regulation: Consumer protection and internal development
Perhaps in contrast to the approval of crypto ETFs in the U.S., global regulators continued to crack down on crypto. Their focus in 2024 has been on the cryptocurrency billionaires that lost the most money, such as former FTX CEO Sam Bankman-Fried or Binance founder Changpeng Zhao with both receiving prison sentences in 2024. In Europe, the upcoming cryptocurrency regulation MiCA openly questioned Tether - the digital coin with the highest trade volume worldwide - and considered a ban of such stablecoins across Europe from July 2024 onwards. Alongside this, many domestic banks continued to develop and test Central Bank Digital Currencies (CBDC), their own variant of cryptocurrency.Monetary policy to shape investor sentiment
The price of Bitcoin faced increasing pressure in May 2024, dropping below 67,500 U.S. dollars. This stemmed from investor caution ahead of a U.S. Federal Reserve policy decision and U.S. inflation figures. By June, the Fed announced it expected a single rate cut in 2024 - opposed to an initial projection of three rate cuts - keeping its interest rate unchanged. As 2024 develops, such developments could continue to impact the market. This because of the international impact of U.S. monetary policy, but also because the U.S. itself has a relatively high share of crypto investors.Cryptocurrencies are a volatile investment product, with business use cases that are still early in development. As 2024 progresses, it is likely there will be plenty of catalysts ahead. For some, this may be an opportunity. For others, this could be a cause for concern.
