Cryptocurrency prices are volatile in the short-term due to market sentiment, but follow longer-term trends driven by fundamentals and macroeconomic factors like interest rates and inflation. While crypto prices fell during the recent period of US Federal Reserve interest rate hikes, with rate increases pausing, crypto and stock prices may rise over the next few years. Approval of spot Bitcoin ETFs could also stimulate greater Bitcoin trading volume and prices. However, the regulatory outlook remains uncertain and new rules may increase stability but also compliance costs. Overall, the document predicts 2024 will be a good year for cryptocurrencies.

1. By: www.ProfitableInvestingTips.com

2. Cryptocurrencies hop up and down in value on a daily
and weekly basis. This is the basis of short term crypto
trading. Cryptocurrencies also follow longer term
swings in value such as in 2017 to 2018, 2020 to 2022,
and from the end of 2022 to the present.

3. Short term up and down movements in crypto prices
have to do with short-term market sentiment.
Movements over the longer term have to do with
fundamentals that drive crypto as well as other
markets such as the stock market. That having been
said, will 2024 be a good year for crypto?

4. Crypto and Interest Rates

5. Crypto winter came about when the US faced the
highest rate of inflation in four decades. Like when
that happened 40 years ago, the US central bank, the
Federal Reserve, raised interest rates month by month.
The point was to slow the economy and bring inflation
under control.

6. They have nearly succeeded as inflation has cooled
significantly. Thus, the Fed has paused their monthly
rate increases. This has encouraged folks trading
crypto as well as the stock market. Rate increases drove
both stocks and crypto down. Now that investors
expect an end to repeated rate hikes, there is the
potential for crypto (as well as stocks) to have a couple
of great years going forward.

8. Spot Bitcoin ETFs As a Stimulus to Bitcoin Trading

9. A lot of folks who invest in things like stocks and bonds
might be interested in crypto investments as well.
However, many of them are not interested in having a
crypto wallet, remembering keys or passwords, or
worrying about blockchain hacks. They like the idea of
buying Bitcoin like they buy stocks using an exchange
traded fund or ETF. There are currently several spot
Bitcoin ETFs waiting for approval with the Securities
and Exchange Commission.

10. If these get approval, it holds the potential for Bitcoin
trading to multiply in volume. How these systems
work is that a person buys shares of the ETF and the
EFT buys and holds Bitcoin. The more folks who buy
into the ETF the more Bitcoin is bought and sold. If
rates stay put or even start to fall and more trading of
Bitcoin happens via ETFs, we could be seeing a
spectacular year for Bitcoin.

11. Regulatory Activity and Crypto Prices

12. The crypto market outlook going into 2024 is still
somewhat uncertain in regard to regulatory activity.
The downward price pressures on crypto during crypto
winter uncovered lots of dumb business practices and
some outright fraud. Crypto businesses have collapsed
and crypto star, Sam Bankman-Fried, is currently
standing trial for fraudulent actions committed as FTX
fell apart.

13. Binance and Coinbase are both being sued by regulators.
The bottom line is whose rules crypto will follow going
forward, its own or those of the larger financial
community. While some regulators would just as soon
that crypto went away, it is not going to.

14. Regulations may make more work for companies doing
business in crypto but they will also most likely make
crypto investments safer for those who have no
interest in gaming the system. It is our considered
opinion that by making the crypto world safer it will
increase interest in long term investments and lead to
greater price stability. All in all we expect 2024 to be a
good year for crypto.

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