Welcome back to Distributed Ledger. This is Frances Yue, a reporter at MarketWatch.
We are approaching the end of a year during which the crypto space witnessed increased regulatory actions: FTX founder Sam Bankman-Fried was found guilty on all seven counts of fraud and conspiracy, and Binance co-founder Changpeng Zhao pleaded guilty to criminal charges related to violating U.S. anti-money-laundering laws and stepped down as CEO of the exchange.
Still, bitcoin
BTCUSD,
rallied this year, with a 130% gain for the year to date, according to CoinDesk data. The crypto is still down more than 45% from its peak of $68,990 in 2021.
I caught up with Anthony Rousseau, the head of brokerage solutions at TradeStation, to talk about his outlook for bitcoin in 2024.
Find me on X at @FrancesYue_ to share any thoughts on crypto or this newsletter.
A bull run in 2024?
Bitcoin has a great setup for a bull run next year, Rousseau said in a call.
The fair value of bitcoin currently stands at around $42,000, while the 200-day moving average of the coin is about $29,000. “These are all kind of moving up,” Rousseau said. Meanwhile, the on-chain data shows that very few long-term holders are selling their bitcoin, a bullish sign for the coin, Rousseau noted.
It is likely that bitcoin will rise above $40,000 at the beginning of 2024 and climb to a new all-time high toward the end of next year, mostly boosted by an expected approval of bitcoin exchange-traded funds in the U.S. and the so-called halving event, which is expected to happen in April, Rousseau noted.
Bitcoin halving refers to a process in which block rewards given to crypto miners are cut in half after every 210,000 blocks are mined, or about every four years. The crypto has historically seen price appreciation in the months after halvings.
The macroeconomic conditions also look favorable to risk assets including bitcoin, as investors expect the Federal Reserve to start cutting its key interest rate as early as March. Traders are pricing in a 46% likelihood that the central bank will lower its interest rate by 25 basis points in its March meeting, according to the CME FedWatch tool.
The 2024 presidential election could also be a tailwind for bitcoin. The cryptocurrency has historically performed well during election years, as the coin rose 160%, 123% and 303% in 2012, 2016 and 2020, respectively.
To be sure, bitcoin — created in 2009 — has a relatively short history. Still, election years tend to be positive for risk assets in general. The S&P 500 saw positive returns in 17 of the past 23 election years, Rousseau noted.
Crypto in a snap
Bitcoin rose 3.4% in the past seven days and traded slightly below $37,800 on Wednesday, according to CoinDesk data. Ether
ETHUSD,
rose 1.8% during the same period, at around $2,030.
Must-reads:
- SoFi Is Exiting Crypto With Banking Regulators Stepping Up Scrutiny (Bloomberg)
- Philippines’ SEC to block access to world’s largest crypto exchange Binance (Reuters)
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