Markets
What Will Drive the Cryptocurrency Market Rally in 2024-2025?
In a downtrend, Crypto analyst Wise Advises in his X job highlighted a major event that he believes will be the most significant bullish catalyst for the cryptocurrency market in 2024-25. While discussions often focus on the potential impacts of Trump’s presidential election victory, the Federal Reserve’s highly anticipated rate cuts, and new FASB regulations, he argues that another factor will positively influence cryptocurrencies during this cycle.
While Mt Gox has shaken up the market, analysts’ bullish theory on FTX fund distribution will be an interesting call for investors who are jittery about the prolonged cryptocurrency downturn.
Here’s what you need to know about this intriguing situation!
FTX Funds Distribution
Wise Advice identified the key event as FTX planned distribution The fund has had to pay out over $16 billion to its creditors, which is expected to happen between the fourth quarter of 2024 and the first quarter of 2025. He notes that most of the claims on FTX assets were made when the market was at its lowest. However, stablecoins like USDC and USDT will be distributed at their full value 1:1.
Market impact
Given the current bullish trend in the market, the redistribution of such a large sum of money is likely to have a positive impact. Wise Advice points out that most of FTX’s creditors are already involved in the crypto space, meaning that this $16 billion is likely to be reinvested in the market. This influx of liquidity could drive Bitcoin and other altcoins to new highs. Notably, Dogecoin (DOGE) is highlighted as a currency that could benefit significantly from this redistribution.
Comparisons with other events
In addition, the analyst downplays the potential impacts of other events that are often cited as significant, such as Mt. Gox Funds Distributions and government cryptocurrency sales. He calls these events mere “noise” compared to the impending FTX distribution, which he believes will be the real game-changer for the cryptocurrency market.
After that ?
Despite the current slowdown, the possibility of a 2024 cycle top for the cryptocurrency bull market cannot be entirely dismissed. Historical trends from previous major bull cycles suggest that the rally is far from over. Some analysts argue that the 2024 cycle mirrors the 2017 cycle, which saw several 25-30% drawdowns before peaking at around $20,000.
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The future of the cryptocurrency market is uncertain. What are your predictions for the impact of this $16 billion distribution?