The crypto market is gaining steam after several false starts in recent months. This time, it feels different, and there are signs that a new market phase may be underway.

The recent price surge isn’t limited to crypto alone; it’s also affecting tech stocks and other assets. However, the pieces needed for a bull market seem to be falling into place. Crypto closely follows the equities market, especially tech stocks, which have been on the rise lately, but there’s more to it than that.

The mainstream narrative around crypto is changing. Even respected financial publications like the Financial Times in the UK are now praising Bitcoin’s merits and price surge. They attribute this rise to the possibility of interest rate cuts in the US rather than the upcoming spot ETF approval, which is a significant departure from the usual crypto cynicism.

This shift in media tone is crucial in normalizing the concept of investing in crypto, especially before the ETF approval. Additionally, news from the SEC suggests that the approval process is entering its final stages, with significant players like BlackRock updating their applications. This sets the stage for a potentially positive 2024.

Financial pundits agree that the US Federal Reserve will likely begin to change its monetary policy in the first three months of 2024. While Fed officials are sticking to the mantra that they will keep rates higher for longer, the markets don’t believe this to be true.

Bond yields in the US and Europe have been falling based on falling inflation rates and the firm belief that central banks will begin to ease monetary policy. Another aspect that will force the Fed’s hand is that next year is the US Presidential election, and no sitting president wants to go into an election with tight monetary policy or their economy in recession.

While the outlook is starting to look positive for next year, there will still be plenty of potential volatility within the crypto market before things get onto a firmer footing. Although YouTube is awash with clickbait claims of Bitcoin going to $100,000 before the halving in April 2024, the reality is that no one knows.

Traditionally, mid to late December is quite volatile for risk-on assets, especially crypto. This is because, for many people, the end of their tax year is the end of December, and they sell some of their crypto to lock in profits or losses for their annual returns.

Around the same time, many portfolios under management have a snapshot taken. It’s common for managers to invest in higher-risk assets throughout the year to generate their target yields, then switch to lower-risk assets for the snapshot.

The curveball this year is the timing of the Bitcoin spot ETF approval. Many expect this to occur sometime in January, and people are buying Bitcoin in anticipation of a price surge, having given up the hope of another dip.

Additionally, many people are starting to take their Bitcoin off exchanges and store it in their cold wallet. This reduces the available supply ahead of ETF providers needing to buy BTC. Should the ETFs be approved en-masse, this could cause a significant price surge as demand would likely hit an all-time high.

Whatever happens in the short term, the landscape for next year looks optimistic. With the tone in the mainstream media starting to look more positive, almost certain rate cuts, the approval of a Bitcoin ETF, and the halving, the stars are again aligning for a crypto bull market.

While we never give financial advice, it’s exciting to be at what looks like the start of a new cycle. This is made even more special for us by the upcoming releases of Paribus, which we detailed in our previous article. We’re thrilled that conditions are improving and the future’s looking brighter after a challenging bear market.