Despite many predictions, Bitcoin failed to break the $100,000 barrier last year. However, it would be wrong to say that the previous 12 months have been bad for the sector.

Even with SEC investigations into cryptocurrency exchanges and a general tightening of regulations, the leading cryptocurrency grew from $16,000 to $44,000 in 2023.

Will the rally continue in 2024?

As in the traditional financial market, we need fundamental triggers to sustain the uptrend. Fortunately, we have them.

First, there is hope that a spot BTC-ETF will be approved on 8-10 January. If it is rejected outright, issuers could sue the SEC, similar to what Grayscale did.

Another critical factor for growth could be the halving of Bitcoin, which will reduce the reward miners get for creating new blocks on the blockchain.

In addition to these positive factors, we can also consider the growth of activity on the blockchain and the rise in stock markets following the US interest rate cut.

Analysts predict that Bitcoin price could rise to at least $54,000 in the short term and to $160,000 after the halving in April 2024.

What about other cryptocurrencies?

Bitcoin's growth generally positively impacts the altcoin market, but there is already a growing interest in the second-largest cryptocurrency by market capitalization: Ethereum.

This is not only because of FOMO, as usual, but because people expect Ethereum to continue leading blockchain technology innovations in 2024 with its updated roadmap.

Another reason for Vitalik Buterin's coin to grow could be that investors are likely to gradually shift their profits from Bitcoin to Ethereum as the cryptocurrency market recovers.

But where will the money come from?

First, if spot ETFs are approved, demand for bitcoins by the funds that will hold them will increase.

Second, US households hold just under $18 trillion in liquid assets, including cash deposits, a massive increase from the 2013 level of $10 trillion.

The question is how much of these funds will flow into the digital asset market. It is also possible that if market sentiment worsens, cryptocurrency will come under pressure.

In short, the market has plenty of money; we just need the right triggers.

What could go wrong?

The main risk for the industry is not so much the tightening of regulations, which surprisingly accelerates the integration of assets into the financial system but manipulations.

For example, malicious actors could try to delink stablecoins such as USDC or USDT from the US dollar again, leading to increased market volatility and possibly a crash.

The second major threat remains hacker attacks, company failures, and, of course, the risk of cryptocurrency asset sales by the US government.