Bitcoin
What will drive the cryptocurrency market bullishness in 2024-2025?
In a downtrend, cryptocurrency analyst Wise Advise in his X publish highlighted one significant event that he believes will be the most substantial bullish catalyst for the cryptocurrency market in 2024-25. While discussions typically focus on potential impacts from Trump’s presidential election victory, highly anticipated Federal Reserve rate cuts, and new FASB regulations, he argues that a different factor will positively influence cryptocurrencies during this cycle.
While Mt Gox has turned the market upside down, analysts’ bullish theory on FTX’s fund distribution will be an interesting indication for investors who are uneasy about the prolonged cryptocurrency slump.
Here’s what you need to know about this intriguing situation!
FTX Fund Distribution
Wise Advice identified the key event as Planned FTX Distribution of over $16 billion to its creditors, which is expected to occur between Q4 2024 and Q1 2025. He notes that most of the claims on FTX assets were made when the market was bearish. However, stablecoins such as USDC and USDT will be distributed at their full value 1:1.
Market Impact
Given the current bullish trend in the market, the redistribution of such a substantial amount of money is likely to have a positive impact. Wise Advice points out that most of FTX’s lenders are already involved in the crypto space, meaning that this $16 billion will likely be reinvested into the market. This influx of liquidity could push Bitcoin and other altcoins to new highs. Notably, Dogecoin (DOGE) is highlighted as a coin that could benefit significantly from this redistribution.
Comparisons with other events
Furthermore, the analyst minimizes the potential impacts of other events that are frequently cited as significant, such as Mt. Gox Fund Distributions and government crypto sales. He refers to these events as mere “noise” compared to the impending FTX distribution, which he believes will be the real game-changer for the crypto market.
What next?
Despite the current slowdown, the possibility of a cycle top for the 2024 crypto bull run cannot be completely ruled out. Historical patterns of previous major bull cycles suggest that the rally is far from over. Some analysts argue that the 2024 cycle mirrors the 2017 cycle, which saw multiple pullbacks of 25-30 percent before peaking around $20,000.
Read too: Crypto News Today: House poised to challenge Biden’s veto of SAB 121
The future of the crypto market is uncertain. What are your predictions for the impact of this $16 billion distribution?