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After a strong start to the year, market participants are wondering what’s next for cryptocurrencies.
Not much, according to some. Others see more price gains through the second half of 2024, following one of the strongest showings in exchange-traded fund history.
This happened despite persistent inflation, geopolitical tension and political changes on American soil, which could put crypto in the foreground from the minds of single-issue voters in November.
Analysts like Matthew Sigel, head of digital asset research at VanEck, see more room to grow based on historical trends.
“If the durability of the current cycle adheres to previous trends, this could indicate a potential market peak between Q2 and Q4 2025,” Sigel said in a recent investor note.
Historically, the cryptocurrency market has gone through distinct four-year cycles, with significant price spikes typically occurring after halvings, Sigel said.
The 2013 to 2017 and 2017 to 2021 cycles followed this trend, with new all-time highs reached after each halving.
Sigel’s analysis posits that the current market cooling phase is a precursor to another upswing.
Matt Hougan, chief investment officer at digital asset manager Bitwise, also sees further upside following the eventual launch of Ethereum spot ETFs in the US, which some experts I believe it could happen this month.
Ethereum ETFs could garner $15 billion in net inflows by the end of 2025, Hougan said in a observation on Monday.
“Investors love tech stocks,” Hougan said, referring to investors’ preferences for “high-growth tech plays” including Nvidia and Meta. “It’s pretty easy for me to imagine investors selling a small amount of their tech exposure and adding ETH.”
Still, the $15 billion figure would fall short of Bitcoin ETFs, Hougan said, which have already amassed $14 billion in less than six months and are expected to reach more than $50 billion by the end of 2025.
There are also political changes to contend with both within the U.S. and abroad, which could change the narrative for clearer regulation for the industry, according to some.
Traders don’t necessarily have to agree with the political shift sweeping Europe and the U.S. to see how it could be more favorable to cryptocurrencies, said Pav Hundal, lead market analyst at cryptocurrency exchange Swyftx. Decipher.
“If nothing else, decentralized finance should certainly be more attractive to both corporate and retail investors when the political environment is so unpredictable,” he said.
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