- Bitcoin halving event in April 2024 to reduce emissions, potentially supporting long-term prices.
- Expectation of SEC approving a spot Ethereum ETF, boosting institutional adoption.
- Resurgence predicted in DeFi, with at least two projects generating over $1 billion in revenue.
Despite recent declines in Bitcoin prices, Vance Spencer, the co-founder of Framework Ventures, maintains an optimistic outlook on the crypto market, foreseeing an exhilarating two-year “rollercoaster” ride. Spencer recently shared his insights in a post on X, highlighting a combination of macroeconomic factors set to propel the crypto space forward. Notably, this assessment comes in the wake of the Securities and Exchange Commission’s (SEC) groundbreaking approval of 11 spot Bitcoin exchange-traded funds (ETFs), providing a regulatory avenue for institutions managing trillions in assets to invest in BTC.
A key factor in Spencer’s projection is the upcoming Bitcoin halving event, scheduled for early April 2024. This event, determined by the network, will mark the start of the fifth epoch, reducing miners’ rewards from 6.25 BTC to 3.125 BTC. The gradual reduction in Bitcoin’s emissions due to halving could potentially lend medium to long-term support to its prices.
In addition to the halving and the expected supply shock for BTC, Spencer anticipates the SEC‘s approval of a spot Ethereum ETF, given the green light already given to several Ethereum Futures ETFs. If authorized, spot Bitcoin and Ethereum ETFs could significantly drive institutional adoption in the crypto space, contributing positively to prices.
Spencer also predicts a resurgence in decentralized finance (DeFi) after the challenges faced in 2022. Following a dip in Ethereum and Bitcoin prices, the total value locked (TVL) across DeFi plummeted below $40 billion, according to DeFiLlama data. However, with crypto prices rebounding, TVL has surpassed $50 billion. Spencer foresees at least two DeFi projects generating over $1 billion in revenue within the next 24 months.
Looking at broader economic factors, Spencer believes that political and macro influences will play a pivotal role in supporting the crypto market. He points to the possibility of the Federal Reserve (FED) altering its monetary policy, slashing rates from 5.5% to approximately 2-3%. On the political front, Spencer speculates a “over 70% odds of a new pro-crypto administration in 2025.”
Despite Bitcoin currently facing downward pressure, experiencing a 10% decline from its recent peak of around $48,700, Spencer views this as part of the anticipated “rollercoaster” ride. Whether Bitcoin finds support around the January 8 lows of approximately $43,000, marking the beginning of this exciting journey, remains to be seen.
Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.