The cryptocurrency market is in a state of eager anticipation as the new year begins with a focus on Bitcoin ETF applications amid macroeconomic concerns. The first pivotal moment of the year will be the Federal Reserve’s decision on interest rates, which won’t be announced until the end of the month, with little data coming from the US until then.
Inflation in the US is trending downward, and market expectations suggest preparations for a Federal Reserve pivot are increasing, potentially ending two years of interest rate hikes. However, according to CME Group’s FedWatch Tool, the probability of a rate change occurring this month remains slightly above 15%, with markets believing that current levels are likely to persist until March.
Jim Bianco, President of Bianco Research, while assessing the remainder of 2024, also considered the impact of the US presidential elections, noting that rate cuts in election years since 1994 have mainly occurred due to crises forcing the Fed to act.
The Bitcoin network starts the year in an upward mode, similar to the previous year, with the upcoming halving event set to intensify competition among miners to unprecedented levels. Data from the monitoring platform BTC.com indicates that the network’s difficulty level will rise by approximately 1.5%, reaching 73.1 trillion.
December was a highly profitable month for miners, with the Ordinals hype driving fees to significantly exceed the multi-year average, leading to daily revenues exceeding 1,500 Bitcoins on December 16. The halving event, which will slash block rewards by 50% overnight in April to 3.125 Bitcoins per block, is on every miner’s radar.
According to data from blockchain analytics firm Glassnode, miners began to realize profits as the year closed, with the balance in miner wallets dropping by approximately 12,000 Bitcoins since mid-October.