Are We On the Verge of a Crypto Bull Run in 2024?

Ripple (XRP) Defeats the SEC in Court

After three years of Ripple (XRP) and the US Security and Exchange Commission dueling it out in court, Judge Analisa Torres declared XRP is not a security as long as it is bought, held and sold by retail investors. Since its win in mid-Summer 2023, XRP has been relisted on all major centralized exchanges in the U.S., and central banks all around the world are piloting international remittance programs, leveraging the XRP ledger. The declaration that XRP is not a security, should lead to other altcoins, facing similar legal battles, yet having favorable opinions.

Spot Bitcoin ETFs

Blackrock, Wisdom Tree, Invesco Galaxy Bitcoin ETF, Valkyrie Investments, Ark Invest, VanEck, Fidelity/Wise Origin and others have applied for Bitcoin Spot Exchange Traded funds. The SEC has denied the Bitcoin ETF applications, citing that there is more research needed with regards to the volatility and market manipulation of Bitcoin. The advantage of a spot Bitcoin ETF is that it gives the clients of these mega-titans the ability to invest in Bitcoin without gaining direct exposure. These companies would hold their customers’ holdings in an account that follows the price actions of Bitcoin. Many analysts predict that an approval of a spot Bitcoin ETF would lead to anywhere from $5 trillion to $15 trillion flooding the market (for context, the current market cap of the entire cryptocurrency market is hovering around $1 trillion). Although the SEC has been extending the deadline for the approval of Bitcoin ETFs, the final hard deadline for a couple of them is fast approaching: On January 10th, 2024 the SEC must render its final ruling on the Ark Invest and 21 Shares spot Bitcoin ETFs. If the SEC cannot provide sufficient evidence to deny the applications, the regulatory body will have no choice but to let the companies open their ETFs. Many believe that as soon as the SEC allows the approval of the first spot Bitcoin ETFs, it will have to allow other companies with similar applications launch their respective funds.

SBF and FTX Trial 

SBF shocked the world when, after having celebrity endorsements from the likes of Tom Brady, Steph Curry, Kevin O’Leary (aka. Mr Wonderful), and Jim Cramer’s CNBC, it suddenly went bankrupt, shortly after the 2020 elections. Its collapse has led to organizations like the Texas Blockchain Council successfully lobbying for crypto exchanges in the state to have to show proof of reserves for all the crypto holdings listed on their exchanges and for the introduction of more regulations at both the state and federal levels. Every crypto bear market has been marked by the bankruptcy of companies that were previously thought to be legitimate. Historically, this culling of bad actors has always led to increased trust in the space and more adoption.

April 2024 Bitcoin Halving 

Every four years there is what many in the crypto and blockchain space refer to as the “Bitcoin Halving.” This occurs when Bitcoin miners get their mining rewards cut in half, therefore leading to an increase in buy-sell pressure that ultimately leads to the price of Bitcoin increasing dramatically. The successive Bitcoin bull run is historically followed by a successive altcoin (any crypto asset other than Bitcoin) bull run.

Cryptocurrency, Politics, and CBDC

Several presidential candidates like Vivek Rameswamey and RFK Jr. (a speaker at this year’s Bitcoin Conference in Miami) have shown support for growing the crypto space in the U.S. through positive regulation. Despite previously making disparaging comments about digital assets by claiming they are “made out of thin air,” President Trump has not only leveraged blockchain technology to create an NFT collection that he sells to his supporters, but there is now credible evidence to suggest that he is an Ethereum whale—a term in the crypto space used to refer to individuals that have enough of a digital asset to influence its price by selling or buying a significant amount of the circulating supply. 

Governor Kristi Noem vetoed a bill that would have regulated cryptocurrencies stating that the bill “opens the door to the risk that the federal government could easily adopt a Central Bank Digital Currency, which then may become the only viable digital currency[…] At this moment in time, such a government-backed electronic currency has not been created. It would be imprudent to create regulations governing something that does not yet exist. More importantly, South Dakota should not open the door to a potential future overreach by the federal government.” Taking things a step further, Governor Ron DeSantis banned Central Bank Digital Currencies (CBDC) in Florida. However, the Biden administration, along with many mainstream Democrats, seem to be supportive of creating a CBDC, which counter to many of the reasons cryptocurrency was created would actually introduce the threat of government surveillance and overreach.

Bitcoin as a National Currency?

El Salvador has adopted Bitcoin as an official currency, alongside the U.S. Dollar. As it builds out the infrastructure within its borders the government has made a promise to buy at least one Bitcoin a month, although it often buys a lot more! In order to attract foreign investment, El Salvador has created a financial sandbox for the blockchain space: There are capital gains exemptions for those working in the cryptocurrency ecosystem. After the first round of elections in Argentina, the country will now head for a runofff election between the top two candidates: Sergio Massa and Javier Milei. Milei is a libertarian economist who has expressed heavy interest in Bitcoin. If he wins the upcoming election on November 19th, the world will be watching to see if he leads his country in the same direction as El Salvador. While Bitcoin as a national currency may make sense in developing nations to help them attract businesses and talented innovators, the additional regulations that would likely come with such an action in a developed nation makes such a proposal much trickier and less desirable for us in the United States.

The Rise of the Rest

The United States is currently the biggest market for cryptocurrency in the world, but there are other countries where crypto adoption is growing exponentially. A notable growing powerhouse in this space is India, which, this year, has surpassed the population of China.  Other emerging economies are also increasingly having a major impact. Many people around the world that have access to cell phones and a mobile network, but may not have access to retail banks, are seeing crypto as a form of a parallel banking economy that grants them “financial inclusion.”

This article should not be taken as financial advice, but as an overview of the current state of bitcoin. 

Authors:

Mike S. Reyes is the founder and CEO of Pernimed. His experience includes corporate training, and teaching in China; and tech sales and political canvassing/lobbying in the United States. In addition to being a TedX series speaker, he has been invited as a guest to speak on Fox News, CNN podcasts and ABC news; and has been featured in articles in the New York Post, Al Jazeera and NY1. A member of various private clubs, his interests include political activism, following all New England sports teams and playing amateur rugby.

Alexandra Black has spent over ten years in the finance industry working with institutional investors on a wide variety of investment strategies. She has held fundraising and investor relations positions in venture capital, private equity, private debt, real estate, hedge funds and traditional capital markets strategies. She graduated from the Questrom School of Business at Boston University with a B.S./B.A. in Business Management with concentrations in finance and marketing.