Listen to the Article: Crypto Soars in the New Year, But How Long Will the ETF Buzz Last?

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As the prop trading community is faced with a crisis​, cryptocurrencies have reached new highs in the new year. Taking Bitcoin's price as an example, at the beginning of February, BTC was priced at $43,078. By February 29, the price had soared to $62,847, marking a 47.74% increase in the past month alone, coming tantalizingly close to its historical peak of nearly $70,000 in 2021.

Bitcoin Hits Record Highs, Altcoins Flourish

Bitcoin, as the leader in the crypto market, has also stimulated the rise of other tokens, leading to a flourishing market this month. Ethereum has surged to $3,400+ level, reaching its peak since April 2022, with a 51% increase in 30 days. The gains for other altcoins are even more staggering. According to CoinMarketCap, among the top 100 cryptocurrencies, several tokens have seen increases of over 100% in the past 30 days. Among them, JasmyCoin saw the highest increase at 303.74%.

Other altcoins with notable increases in the past 30 days include Worldcoin with a 238.56% increase, Uniswap with a 79.36% increase, Pepe with a 186.45% increase, and Dogecoin with a 55.81% increase.

Catalysts Driving the New Year Bullish Crypto Market in Crypto: More Than Just Spot ETF Approval

The robust performance of cryptocurrencies in 2024 can be attributed to the approval of Spot ETFs in January. Fazzaco reported in January that the U.S. Securities and Exchange Commission officially approved the first exchange-traded funds (ETFs) tracking Bitcoin to be listed in the United States.

Although the commission expressed reservations after the approval, as noted in article "SEC Says Yes to Spot BTC ETF, But Not Everyone Is Happy," where we quoted SEC Chairman Gary Gensler's statement on January 10th, reiterating that the approval of ETFs by the SEC does not imply that the commission's view of the status of crypto assets under the Securities Laws remains unchanged.

Despite the SEC's continuous negative stance, this milestone signifies that traditional brokers have officially opened up convenient Bitcoin exposure to traditional financial individuals and institutions. This not only boosts the confidence of crypto traders and businesses but brings widespread attention and liquidity to the industry too, attracting a large influx of new funds. Additionally, market recovery, enhanced expectations of global economic recovery, and boosted investor confidence have all contributed to the rise in prices of cryptocurrencies like Bitcoin.

Apart from these, this bull market is also a result of the market's own recovery from the severe downturn experienced in the crypto market after Bitcoin reached its all-time high in 2021, followed by an 80% market value plunge into the "crypto winter".

As we mentioned in the article "Crypto Chronicles: The Most Memorable Events of 2023​," Bitcoin is expected to undergo its fourth halving in 2024. After this halving, each block will only contain 3.125 BTC, and after 2028, there will be another halving, resulting in fewer Bitcoins, thus continually driving up the price.

Maybe the Effects of ETF Will Continue, Maybe Not. But the Crypto Market Is Healing

The approval of ETF spots has evidently been the biggest factor fueling this round of skyrocketing in the crypto world. However, as mentioned earlier, this bull market has been driven by various factors. Therefore, how long will the stimulative effect of ETF last remains to be seen over time.

Nevertheless, with the expectation of a Federal Reserve rate cut in 2024, the self-correction, adjustment, and improvement of the entire crypto system following the collapse of several crypto loan companies, the gradual clarification of global crypto regulatory policies, ongoing industry innovations, and other favorable factors, investor confidence is gradually being restored. Perhaps, the crypto industry is entering the next positive phase of development.