Is Crypto Winter Finally Coming?

What are predictions?

In a note published on Monday, Standard Chartered analyst Geoff Kendrick wrote that bitcoin could potentially reach $100,000 by the end of 2024. He said that the crisis in the traditional banking sector, including the Silicon Valley bank crisis, has given momentum to bitcoin and that the crypto winter is finally over. He also said that Europe’s regulation of crypto should “provide a tailwind” for bitcoin. JP Morgan predicted an upward move in the price of bitcoin due to a technical change in the cryptocurrency’s underlying blockchain, called the “halving”, that makes it up. More expensive to produce.

Are these just predictions?

No. While analysis from Standard Chartered and JP Morgan may have caught the eye, bitcoin has been rallying throughout 2023. In fact, the world’s most valuable cryptocurrency crossed the $30,000 mark for the first time in ten months earlier this month. Although it has fallen since then, experts have noted that the collapse of Silicon Valley Bank and other crises among US banks have confirmed the belief of enthusiasts that the crypto system is not influenced or controlled by central authorities. However, this may not necessarily be true, as crypto markets have also been known to fall alongside traditional stock markets in the past.

What does ‘half’ have to do with it?

The ‘halving’ of bitcoin happens every four years. This increases the scarcity of bitcoin, which drives up the price. Bitcoin prices typically rise around this event, with the next halving due in about a year. The three halving events so far have corresponded to an increase in bitcoin’s price, with the first occurring at a time when its price has increased nearly 100x.

Could there be other reasons for this increase?

Yes. For example, the Ethereum blockchain was invented in 2015, about a year before Bitcoin’s third halving. This gave rise to ‘decentralized apps’, or dApps—apps built on decentralized blockchains—which have provided more impetus to the crypto ecosystem than anything else in its short history. Dapps provided utility to these digital currencies, and propelled Ether to become the second most valuable crypto in the world. Other reasons include the formation of large crypto exchanges and large banks paying attention to the industry.

Is this a potential bull run?

Even though some experts expect a bull run for cryptocurrencies once again, they do not expect it to last forever. The crypto market has gone through several bull runs in its short history, and they are always followed by a bear run. No one expects volatility in crypto markets to magically disappear, and even though the industry touts government regulations as a welcome move, some are still worried about the damage to the industry and investors’ ability to invest in digital assets. can deliver. Finally, a bull run does not negate the possibilities of fraud, as seen in the case of FTX.