Key Takeaways
- The approval of a spot Bitcoin ETF has been the key area of focus for crypto investors, as it could broaden access to Bitcoin.
- Optimism surrounding the possible approval of a spot Bitcoin ETF helped contribute to a rally in the price of Bitcoin.
- 2023 was a pivotal year in terms of crypto enforcement actions, with further regulatory clarity expected to arrive in 2024.
- An end of policies focused on monetary tightening from central banks around the world could also lead to positive outcomes for risk assets like cryptocurrencies.
The Spot Bitcoin ETF Could Be a Game Changer
Ever since Blackrock (BLK) originally filed its spot Bitcoin ETF application with the U.S. Securities and Exchange Commission (SEC) in June, the impending approval of such a financial product has been the key focus for the crypto market.
So far, retail investors can only gain cryptocurrency exposure through ETFs that trade in cryptocurrency futures. A spot Bitcoin ETF would allow investors, especially retail investors, to gain access to Bitcoin without needing to hold their investment in a Bitcoin wallet.
Analysts expect big money to flow into Bitcoin spot ETFs if the SEC gives its approval, and that optimism has helped boost the price of Bitcoin.
- The SEC has reportedly held multiple rounds of talks with prospective ETF issuers.
- Blackrock and others have also filed for spot ether ETFs, but approval for those products remains uncertain.
Why The Upcoming Bitcoin Halving Will Be Crucial
Bitcoin halving, expected in 2024, involves a halving of rewards to miners, impacting the circulating supply and price of Bitcoin.
The Grayscale report suggests that the 2024 Bitcoin halving could be more impactful due to current Bitcoin supply distribution.
- The report anticipates significant impacts from macro events like regulatory approvals.
- Sabre56 CEO Phil Harvey believes the mining industry will maintain its health even without a spot Bitcoin ETF approval.
Clarity On Crypto Regulation In The Cards?
2023 saw significant crypto enforcement actions indicating potential regulatory changes in the future.
Regulatory clarity may arrive in 2024, with traditional financial titans entering the crypto market.
- U.S. Commodity Futures Trading Commission Chair points to increased concerns over crypto’s use in illicit finance.
- Potential policy changes by the Financial Account Standards Board and central banks may impact crypto markets in 2024.