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Cryptocurrency Crash or Comeback? Your Ultimate Guide to 2024 Trends

Bitcoin (BTC) and other major cryptocurrencies surged to new 2023 highs in December as a handful of major financial institutions await the hoped-for approval of the first U.S. spot Bitcoin exchange-traded fund.

In December, the U.S. Securities and Exchange Commission reportedly met with representatives from at least seven companies seeking to launch spot Bitcoin ETFs in early 2024, including BlackRock, Grayscale Investments, ARK Investments and 21Shares.

But while many crypto investors believe spot Bitcoin ETFs would open the door for institutional crypto investment and be a bullish catalyst for the market, some critics are concerned about the potential negative implications of an influx of institutional cash.

Meanwhile, the legal and regulatory environment for crypto remains uncertain as investors anticipate major court rulings in the coming months related to ongoing SEC cases against Ripple, Coinbase, Binance and Kraken. Looking ahead to 2024, crypto industry experts are monitoring spot crypto ETF developments, institutional crypto activity and a potential slowdown in the U.S. economy.Optimism surrounding a potential wave of spot Bitcoin ETF approvals sent Bitcoin surging to new 52-week highs above $44,700 in December, but Bitcoin pared back some of its gains in the closing week of the month.

Bitcoin ended December up 12.6% for the month, finishing off 2023 above $42,600. Bitcoin prices gained 156% for the year, the leading crypto’s best annual performance since 2020.

Ethereum (ETH) prices rose 15.7% in December to close out the year at $2,353. Ethereum prices gained 91% in 2023.

Inflation trended lower in 2023, triggering a rebound in cryptocurrencies and other risk assets.

Among the most popular altcoins, Solana (SOL) and Avalanche (AVAX) were top performers in 2023. Solana’s recent rally has been driven in part by investor enthusiasm for its network’s fast transaction speeds and cheap fees, as well as a handful of meme coin air drops to Solana users.

The total market capitalization of the global cryptocurrency market peaked at over $2.8 trillion in November 2021 but dropped back below $800 million during the worst of the crypto winter in 2022. That market cap has recovered to $1.7 trillion heading into 2024.At least 13 asset management firms, including BlackRock, WisdomTree, Valkyrie and others, are still awaiting an SEC ruling on proposals to launch spot Bitcoin ETFs, which would invest in the cryptocurrency itself rather than Bitcoin futures contracts.

The SEC is approaching a January 10 deadline to rule on a joint proposal from ARK and 21Shares, but institutional insiders anticipate the SEC will approve several applications in the opening business days of 2024 before it reaches the deadline.

The SEC met with at least seven spot Bitcoin ETF applicants on December 21, according to executives from two of the firms who asked not to be identified. Speaking on background, the insiders said the SEC gave the applicants until December 29 to amend their applications before the regulator makes its final rulings.

Any applicant that did not submit the final version of its application by December 29 will reportedly not be included in the first wave of approved funds in early January.

The SEC has approved several cryptocurrency ETFs that trade Bitcoin and Ethereum futures contracts, but it has repeatedly rejected applications for spot crypto ETFs. In its rejections, the SEC has argued spot crypto ETFs are not safe for investors because of the crypto market’s vulnerability to manipulation.

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