The cryptocurrency market has been on the rise since the beginning of 2024, and the main indicators are green. Can this trend last and signal the end of the bear market?
Since the start of 2024, the world of cryptocurrencies has been experiencing a reality to which it has not been accustomed for some time: good news is coming. The price of bitcoin reached $45,000 at the very beginning of January, and has since exceeded the $50,000 mark, a threshold it had not reached since the end of 2021. It is now the turn of Ethereum, the second largest cryptocurrency in terms of valuation and popularity after bitcoin, to see its price reach a historic level, at $3,000.
All this news raises a question: could it be that the bear market is over? Explanations.
What is the bear market?
The term bear market designates a bear market, in sharp fall over a significant period – it is not just a temporary drop. It is used to talk about both the traditional financial market and the crypto market. Generally, we can speak of a bear market when we observe a drop of more than 20% in values over a period of at least several weeks.
The crypto market, but also that of traditional finance, have both just gone through a bear market. In terms of cryptocurrencies, the bear market began in October 2021, after the bitcoin price record. Its price then collapsed for several months in a row, taking with it the valuation of the entire crypto ecosystem.
But, there seems to be change. Since mid-2023, the price of bitcoin has started to rise again, and it is not the only one: the valuation of the entire sector is increasing.
Is this the end of the bear market?
The first factor, ” this is the bitcoin halving approach “. The bitcoin halving is an event that happens every four years, and is highly anticipated by miners and crypto fans. The halving refers to the moment when miners will earn fewer bitcoins for each new block created: for now, miners earn 6.25 bitcoins. After the halving, this amount will increase to 3,125 bitcoins.
Halving may seem contradictory at first glance, but on the contrary this operation aims to make bitcoin more rare – and therefore, to mechanically increase its value. This is exactly what happened after the last halvings of 2016 and 2020, which were followed by bull markets — the opposite of the bear market, when prices soar.
Could bitcoin break its previous record in 2024? “ Yes it's possible », Indicates Claire Balva. “ I am not an analyst, but it is possible, and when we look at past performances, during the last bull markets of 2017 or 2021, we see that records were broken at those times. »
Especially since this is not the only good news regarding bitcoins. “ On the other hand, there was the arrival of bitcoin ETFs which boosted prices from the start, and which still contributes to the rise. We also await news of Ethereum ETFs, which could soon be authorized. » And which could therefore push the market even further upwards.
Above all, ” the atmosphere in companies is significantly more positive than a year or two ago », notes Claire Balva. “ We feel that enthusiasts and businesses have regained hope, and we also expect positive things from a reputation point of view “. The crypto world has been rocked by several impressive scandals and bankruptcies, such as those of Terra and FTX, two giants that fell in a matter of hours following poor management.
“ These scandals shocked public opinion and brought projects to a halt in certain companies. », recalls Claire Balva. “ Some banks that wanted to do crypto stopped everything. But even before these cases, crypto had a negative reputation, particularly with clichés about the financing of terrorism. ” Despite this, ” when we look at the adoption rate of the general public in France, we see that it has increased, even with the scandals. We are on an increase. » Enough to make companies optimistic for 2024, indeed.
