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According to analysts from Adamant Research and Standard Chartered bank, bitcoin may experience a bullish run in the second half of 2023, potentially driven by increased adoption by traditional financial firms. While the entire U.S. cryptocurrency market may not follow suit, bitcoin could see a positive trend.

Greater Adoption by Traditional Financial Firms Could Boost Bitcoin Prices

The loss of investor confidence in the crypto markets due to a series of crypto-related bankruptcies, culminating in the collapse of FTX in November, led to a period of skepticism. However, recent developments have rekindled interest in bitcoin, as prominent companies like Blackrock, Fidelity Investments, Invesco, and Wisdomtree have intensified their efforts to establish spot bitcoin exchange traded funds (ETFs).

Analysts Suggest the Worst May Be Over for Bitcoin Prices

According to Adamant Research, bitcoin will likely continue its accumulation phase within the range of $22,000 to $42,000 before eventually reaching a new all-time high surpassing $120,000, fueled by a multi-year bull run.

Adamant Research, which released its first report on bitcoin over a decade ago in November 2012, has consistently issued reports during periods of historically undervalued levels in the crypto markets, including 2012, 2015, and 2019. Their latest report, published in April 2023, points to factors such as persistent high inflation and a troubled bond market as contributors to the upcoming bitcoin bull market. The report also advises investors to focus on bitcoin rather than diversifying their crypto assets.

Standard Chartered Bank, in an April 2023 note, similarly predicts the end of the prolonged crypto winter and suggests that bitcoin could surge to $100,000 by the end of 2024. The bank attributes this optimism to various factors, including the banking sector’s solvency crisis, which has restored bitcoin’s reputation as a decentralized and scarce digital asset. The analysts expect the bitcoin price to continue rising as the macro backdrop for risky assets improves, especially with the Federal Reserve shifting away from tightening policies. Additionally, the upcoming halving event in 2024, which will halve the reward for miners, is expected to further enhance bitcoin’s value.

Regulatory Developments Demand Attention

Recent months have witnessed the U.S. Securities and Exchange Commission (SEC) taking action against several cryptocurrency firms, such as Binance, Coinbase, and Kraken. The SEC’s contention lies in its classification of non-bitcoin crypto assets as securities, leading to actions against platforms for selling unregistered securities.

The outcomes of ongoing legal battles, such as the Ripple Labs v. SEC case to determine the security status of the XRP token and the SEC v. Coinbase case to assess whether staking constitutes the sale of unregistered securities, could have broad implications for the crypto markets.

Potential Impact of a U.S. Recession on Crypto

Should a U.S. recession occur, it could affect crypto asset prices and demand for high-risk assets. However, if the recession results from poor government policies, crypto might be viewed as a decentralized digital safe haven, potentially leading to a bullish scenario for the market. According to a May report from S&P Global, crypto could prove valuable in countries grappling with heavily depreciating currencies. Nevertheless, S&P analysts note that there is no conclusive data available to confirm whether crypto can serve as a reliable inflation hedge.

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