Analysts at three crypto exchanges and a crypto lending platform believe that institutional investors will play a more active role in the cryptocurrency industry in 2024. This is due to the expected approval of the spot Bitcoin ETF, as well as the US Federal Reserve's interest rate cut policy and regulatory clarity that may emerge.
Analysts at three crypto exchanges and a crypto lending platform believe that institutional investors will play a more active role in the cryptocurrency industry in 2024. This is due to the expected approval of the spot Bitcoin ETF, as well as the US Federal Reserve's interest rate cut policy and regulatory clarity that may emerge.
According to some analysts, this has already begun. According to data provided by the Deribit derivatives exchange, there has been a noticeable increase in activity from institutional investors since October 2023. Deribit Commercial Director Luuk Strijers also commented on the issue. According to him, seasoned participants with experience in traditional markets are already positioning themselves to become more involved in the market in 2024.
Potential approval of spot Bitcoin ETFs
Comments were also made by Bitfinex analysts. The spot Bitcoin ETF approval is cited as the primary driver for participation by traditional financial institutions in the process.
The world's largest asset managers, such as Blackrock, Fidelity, Valkyrie and ARK Invest, continue to vie for the approval of the first spot Bitcoin ETF application to emerge from the US Securities and Exchange Commission. A positive completion of such a financial process would provide institutional investors with a regulated roadmap to trade on the price of the world's largest cryptocurrency.
The first statement made by Bitfinex analysts was as follows:
The potential approval of the Ark Invest spot Bitcoin ETF in January could be a significant driver for Bitcoin's appreciation, as it would provide a regulated and more accessible investment vehicle for both retail and institutional investors.
Like most analysts, the Bitfinex team believes that the Spot Bitcoin ETF approval is most likely to be approved in the first half of January. Analysts are predicting a spot Bitcoin ETF to be approved by January 10, 2024. Clarifying the basis for this prediction, analysts state that it is based on the latest amendment to ARK Invest's spot Bitcoin ETF application, which includes additional risk disclosures.
Bitfinex analysts also draw attention to potential interest rate cuts in 2024. They suggest that interest rate cuts will encourage institutional investors to make risky transactions. This enthusiasm around risky assets could take Bitcoin, the pioneer of all cryptocurrencies, to unexpected heights.
The statement made by Bitfinex analysts was as follows:
An interest rate cut could make risky assets like Bitcoin more attractive to institutional investors seeking higher returns in a lower interest rate environment.
