Bitcoin, Ethereum, Dogecoin & Co.: Crypto is booming - but for how much longer?

The drivers of the crypto rally

November 2024 was a “golden” month for coins and tokens. For example, Bitcoin, Ethereum and Shiba Inu On a monthly basis, over 40% in value and Dogecoin even reached around +200%.

A key driver of the rally is the election victory of “crypto president” Donald Trump. Once known as a critic of Bitcoin, the future US president is now positioning himself as an advocate of digital currencies. During his election campaign, he announced at the Bitcoin conference in Nashville that USA as “crypto capital of the world” to make Bitcoin a global “superpower.” Trump is supported by Elon Musk, who regularly boosts Dogecoin prices with statements on his platform X.

In addition, many expect Trump to replace the chairman of the SEC (US Securities and Exchange Commission) with a candidate who is positive about cryptos and would thus provide the industry with a tailwind.

In addition to Trump, the crypto bullrun is fuelled by other developments. Among others, from the Approval of several Bitcoin ETFs in the USA. Bitcoin ETFs (exchange-traded funds) are investment products that replicate the performance of Bitcoin without investors having to directly own the cryptocurrency. They make it easy to invest via traditional stock exchanges and thus make Bitcoin accessible to a wider range of investors.

It is important to differentiate between different forms: With Bitcoin ETF, investors benefit from price increases, while there is no need to manage wallets and private keys. Since the Bitcoin ETF was approved in January, over 13 billion US dollars in Bitcoin ETF flowed. Bitcoin Futures ETF invest in Bitcoin futures contracts that are traded on exchanges. These are derivatives that are based on future Bitcoin prices. A third variant - so-called Spot ETF - was approved for the first time at the end of July 2024. The US Securities and Exchange Commission (SEC) has approved the so-called “19b-4” applications filed by several asset managers for the Ethereum Spot ETF. “Spot” stands for the physical asset Bitcoin, which is held by the fund. Which means that the ETF owns and stores real Bitcoin.

In addition to new investment concepts, the loose US interest rate policy is also playing a role in the crypto rally, as falling interest rates make risky investments and alternative, non-dollar-linked currencies more attractive. This also results in Trump's idea With Bitcoin, one

Establish a national financial reserve. Experts emphasize that Bitcoin, like gold reserves, can hedge against inflation and geopolitical risks. This is because the maximum amount of Bitcoin is limited to 21 million units.

‍

What experts expect

Of course, no one can predict with certainty how the price of cryptocurrencies and meme coins will develop in the coming months and years. But there are some trends among experts. For example, the fact that the development of structured crypto products is being promoted is rated positively. These are usually tailor-made investments with specific risk/return profiles, which are usually developed by large financial institutions. This is likely to attract fresh capital and a new wave of institutional traders.

Donald Trump's presidency is also interpreted by many as a crypto driver for the reasons mentioned. However, as fans of cyber currency obviously have high expectations of Trump's crypto policy and Elon Musk's growing influence on the government, the potential for disappointment is great. According to experts, if Trump does not implement his election promises, the crypto market could quickly collapse again.

A significant setback would also be possible if Bitcoin were to break the psychologically important mark of 100,000 dollars and trigger a wave of sales as a result. A similar pattern emerged in early March this year, when Bitcoin lingered near its then-all-time high of around $70,000 for almost seven days before market participants took profits in anticipation of a potential sell-off. Bitcoin then plummeted to around 60,000 dollars.

With regard to Bitcoin price targets for the coming years Experts have different opinions. Analysts believe that Bitcoin could exceed the $100,000 threshold by the end of the year. Investment banks such as JPMorgan and BlackRock have set long-term price targets of 146,000 and 200,000 US dollars, respectively. Bernstein Research also predicts that Bitcoin could reach 200,000 US dollars in the coming year. Long-term scenarios up to 2030 paint even more ambitious pictures: Price targets of 700,000 to one million US dollars are discussed.

‍

Blockchain can do more than Bitcoin

Cryptocurrencies and coins as speculative deposit funds are of course an option for risk-savvy investors. However, you should always remember that massive price drops and even total loss are entirely possible.

However, the blockchain is not only designed for trading in speculative crypto assets, but is also very important in areas such as financial and payment transactions, supply chain management, healthcare, AI, gaming or even in administrative processes. This is because blockchain technology makes it possible to carry out transactions between various players directly, transparently and in a tamper-proof manner and to automatically process individual business processes based on smart contracts.

In this context, the tokenization of assets on the blockchain is also trend-setting. This is because so-called crypto assets give investors the opportunity to directly participate in the future blockchain technology and the projects and business models based on it. The spectrum ranges from collectibles to private equity, real estate to infrastructure investments - Asset classes that are now also accessible to private investors thanks to blockchain.

‍