Potential Triggers for the 2024 Crypto Bull Market

Florian Döhnert-Breyer

Lawrence Trent

At our private investor events, we are currently receiving a recurring question:

What could spark the next crypto bull market?

Investors

The following article provides a comprehensive overview of the potential catalysts.

Event-Driven Triggers

What are two specific events that could trigger a crypto bull market?

1. SEC Approves a Bitcoin ETF

• BlackRock, Fidelity and VanEck all submitted Bitcoin ETF applications in the summer of 2023.
• The SEC is expected to decide on ETF applications no later than mid-March 2024.
• A Bitcoin ETF will contribute significantly to the institutionalisation of Bitcoin and thus reduce barriers to capital entry.

For a more detailed analysis of the Bitcoin ETF, please refer to the F5 Crytpo article and podcast

2. Bitcoin Halving

• The Bitcoin halving is expected to occur at the end of April 2024.
• The Bitcoin mining reward per block will reduce from 6.25 BTC to 3.125 BTC.
• Miners receive fewer BTC, mining sell pressure is reduced.
• Widely considered a bull market trigger and a trend-setting event within the crypto community.

Dynamic Catalysts

What are five sustainable developments that could trigger a crypto bull market?

3. Stablecoin Adoption Breakthrough

•  The integration of stablecoins in widely used services will lead to an indirect adoption of crypto assets.
• Traditional web platforms, like WhatsApp, X, Telegram, WeChat, or PayPal, are increasingly recognising the rationale behind developing their own stablecoin offering.
• PayPal’s stablecoin (PYUSD) was launched on Ethereum in the summer of 2023 in collaboration with Paxos.
• Stablecoins may not advertise their underlying technology prominently, however their adoption is a success for blockchain infrastructure. 

4. Establishment as a Store of Value

• Central banks, governments and companies hold crypto assets, especially Bitcoin, as a store of value.
• Established stores of value like gold or real estate are supplemented or replaced by Bitcoin.
• Currently approximately 1.12 million BTC are held by public and private companies as well as by governments, with Microstrategy standing out, owning 0.728% of the total 21 million BTC supply.

5. Establishment as a Means of Payment

• Countries with high inflation or the ambition to establish a crypto ecosystem are adopting cryptocurrencies as a means of payment.
• In El Salvador and the Central African Republic, Bitcoin is used as an official means of payment (legal tender). In the Swiss city of Zug, taxes can be paid with select cryptocurrencies.
• Tesla has temporarily paused Bitcoin acceptance but hold on to Bitcoins earned so far.

6. Economic Extremes

• Financial and banking crises have proven to be positive for cryptocurrencies.
  • BTC is considered a safe and independent asset and has little correlation with traditional investments.
  • For example, during the banking crisis around Silicon Valley Bank and Credit Suisse in February 2023, Bitcoin performed exceptionally and generated a large portion of its 2023 performance in the first months of the year.
• Consumer crises have also been positive for cryptocurrencies.
  • Example: Corona stimulus checks in March 2020 in the USA.
    • 7% of the checks were invested in cryptocurrencies, and Bitcoin benefited significantly.
  • China’s consumer economy has sharply declined and is a candidate for stimulus checks in 2024.
• Boom cycles in the economy have also been positive for cryptocurrencies.
  • The pause in rate hikes or even rate cuts by major central banks can stimulate an economic cycle and ignite a new appetite for investment.
  • Investments and their returns flow into all asset classes, leading to a general increase in valuations.
  • Budgets in surplus have more tolerance for risky investments.

7. Breakthrough in Gaming (GameFi)

• The market for video games is considered to be one of the largest and fastest-growing entertainment sectors in the world, with a global revenue of approximately €200 million in 2022.
• The integration of blockchain technology into games for in-game payments, digital NFT skins, or for decentralized skin trading is already making its way into the gaming industry. All major gaming studios are adding crypto elements into future games, leading to indirect adoption of crypto assets.

The described triggers for a crypto bull market are the most relevant ones for us in the next two years.

It’s not a question of whether the triggers and scenarios will occur, but rather “when.”

The F5 Crypto Fund 1 is positioning itself in line with the potential triggers for a crypto bull market and is currently investing in sideways markets at appropriate entry prices.