Why Is Crypto Going Up?

Join us as we explore the multifaceted reasons behind the crypto market's ascent in 2024. From the institutional adoption to global economic factors, we will analyze the key components that are driving the crypto market upwards.

The cryptocurrency market has experienced significant growth in 2024, prompting widespread curiosity about "why is Bitcoin and other crypto going up today." This article seeks to answer that question by exploring the multiple factors that have contributed to this trend.

Performance of the most popular cryptocurrencies in 2024

Most major cryptocurrencies, excluding, of course, stablecoins, have seen notable growth in the first quarter of 2024. Of particular note is the first and largest cryptocurrency, Bitcoin, which has set a new all-time high.

Top cryptocurrencies performance in 2024

Why is the crypto market going up in 2024?

On March 14, 2024, Bitcoin's price hit an all-time high, reaching $73,750. Prior to that, the bitcoin price reached $69,000 in November 2021. The crypto market in general tends to correlate with changes in the Bitcoin price, and this time was no exception. However, what exactly has driven the growth of the crypto market? Well, this growth was caused by several factors.

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Integration with traditional financial systems

One of the important drivers of crypto market growth in early 2024 was the increased integration of cryptocurrency into TradFi, namely the launch of Bitcoin spot exchange-traded funds (ETFs).

On January 11, 2024, Bitcoin-based spot ETFs were launched in the United States, the largest financial market. The issuers of these ETFs were investment giants: Blackrock, Fidelity, Valkyrie and other large investment management companies.

Despite a number of serious disadvantages of this way of investing in Bitcoin compared to direct purchase, many investors have found it convenient enough to opt for it. The emergence of this way of investing in Bitcoin has led to an influx of investors who had not previously invested in crypto. This, in turn, has led to a noticeable increase in demand for Bitcoin.

Anticipation of halving

Bitcoin halving is a programmed event in the Bitcoin protocol that occurs once every four years. The result of this event is the reward for Bitcoin block mining being halved.

The latest halving happened on 20.04.24 and was preceded by a lot of excitement from crypto enthusiasts and investors. This was the fourth halving since Bitcoin's launch in 2009. Each of the previous three halvings was followed by a subsequent rise in price. After every halving, Bitcoin hit a new all-time high. The expectation of this pattern repetition also added to optimism among crypto market participants.

Market demand and adoption

The retail adoption of cryptocurrencies is also on the rise. More individuals are becoming familiar with crypto assets and are using them both for investment and in their daily lives. This trend is fueled by user-friendly platforms, increased accessibility, and the proliferation of educational resources that explain cryptocurrencies. As grassroots users enter the market in greater numbers, their collective buying power contributes significantly to the upward momentum of crypto prices.

Media and public perception

Market sentiment in 2024 is heavily influenced by both traditional media and social media. Positive media coverage and the optimistic tone of online communities have created an environment of enthusiasm, which in turn supports the growth of the cryptocurrency market. As the public becomes more educated and informed about cryptocurrencies and their potential benefits, the demand for cryptocurrencies keeps on rising. This growing awareness has led to increased adoption rates, with individuals and businesses using cryptocurrencies for a variety of purposes, including payments, investments, and remittances.

Macroeconomic factors

Another positive factor for the crypto market was investors' expectation that the traditional financial markets sentiment would improve. And although initially the crypto market was rather poorly correlated with TradFi markets, this correlation is growing stronger every year. The crypto market has become dependent on the performance of the financial market as large institutional investors from various industries have entered the crypto industry.

In addition, in recent years, large cryptocurrencies, especially Bitcoin, have become increasingly seen as a hedge against inflation. This is especially true in countries where inflation is a serious problem for the population, such as Venezuela or Nigeria.

Why crypto is going down today

Bitcoin's current decline, which is affecting the entire crypto market, has two main reasons.

First, in late June, representatives of the crypto exchange MtGox, which went bankrupt in 2014, announced that payments to affected customers would begin in July.  As a result of these payments, 142,000 Bitcoins (more than $8 billion at the current price) will hit the market.

In addition, since early July, the German government has been selling confiscated Bitcoins. Germany found itself on the list of the largest Bitcoin-holding countries in early 2024 when German authorities seized 50,000 Bitcoins linked to the pirate website. These sell-offs put additional pressure on the price, especially as news about transfers of confiscated Bitcoins to exchanges is widely reported in media and thematic channels, which also affects market sentiment.