Three factors that contribute to the rise in the price of bitcoin

The year 2023 has been referred to as the ‘crypto asset winter’. However, it is no exaggeration to say that this situation is no longer the case.

There are a number of positive factors for bitcoin in 2024, and depending on the situation in traditional and existing finance, the price could even go up.

So what are these factors? When could bitcoin's price rise? This special feature explains three factors that are likely to have a significant impact on the future rise in the price of bitcoin.

Footsteps of recession in the financial markets

The current crypto asset market is definitely emerging from its ‘winter period’. Footsteps of recession are being heard in traditional financial markets, and with rising geopolitical risks such as the uncertain outlook for the Middle East, it is hard to read when the market will collapse from underfoot.

Against this backdrop, the crypto asset market has been heating up over the approval of a bitcoin physical ETF in the US, with many crypto assets, including bitcoin, reaching new highs for the year in November. Bitcoin, in particular, is currently close to 5.8 million Japanese yen, and is on the verge of breaking its record high set in November 2021.

This article discusses why the market for bitcoin and other crypto assets is booming, and what the factors for future growth are.

Organising the current crypto asset market

First, we will explain the current situation of the crypto asset market with the latest trends. As mentioned earlier, the crypto-asset market is gaining momentum as the likelihood of the SEC (US Securities and Exchange Commission) approving a physical bitcoin ETF is increasing by the day.

The feasibility of a physical bitcoin ETF, which has been hampered by risks and the SEC's tightening of industry regulations, has been given a tailwind by a combination of factors.

In addition, LINK and XRP are notable for their gains in individual stocks. Chain Link has seen its price rise by as much as 100% over the past month on the back of its initiatives related to RWA (Real World Asset) tokens, which are currently attracting increasing attention, and its demonstration tests for trade transactions with major companies such as Sumitomo Corporation.

XRP's annual event ‘SWELL’ can be seen as an ‘annual’ price increase, but it was also boosted by the announcement of ‘Ripple Payments’, an advanced version of the existing RippleNet. In addition, many other crypto assets, particularly major altcoins, are also increasing in price.

Expectations for the approval of a physical bitcoin ETF have seen funds flow into bitcoin, while at the same time, speculative buying is taking place in anticipation of a lull in the overheating.

Policy rate unchanged

The Federal Reserve's decision to leave policy rates unchanged at its November FOMC (Federal Open Market Committee) meeting, and the growing expectation that it will cut rates next year, has also had a positive effect on the crypto asset market.

Given the significant inflows into high-tech stocks, institutional investors may increase the proportion of risk assets in their portfolios in the future.

On this basis, the crypto asset market is currently positive, especially for bitcoin.

Let us now delve into what the future holds and what factors will influence price fluctuations.