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Factors That Boosted Crypto in Q1 Could Continue
The interplay between regulatory developments, market dynamics, and macroeconomic factors created a challenging environment but also full of opportunities
Günay Caymaz, a crypto specialist at Investing.com., in an analysis talks a bit about this moment in the crypto world and highlights that, after the SEC approved the listing of bitcoin ETFs in the first month of 2024, a 'sell in fact' effect occurred in the crypto market for a short period of time.

"Cryptocurrency markets have performed impressively in the first quarter of 2024. However, the second quarter started with an unsettling outlook. In January, we saw the approval of the spot Bitcoin ETF, which is seen as a turning point for crypto markets. The expectation of a spot bitcoin ETF, which was revived with BlackRock's registration in the second half of 2023 with the Securities Exchange Commission (SEC, THE U.S. VCM), became the driving force of the market until January of this year," he states.

The acceleration of fund inflows into the Bitcoin ETF spot market, which remained stable until the end of January, impacted bitcoin starting in February. The price of the market's leading cryptocurrency reached its new record high of $73,777 in March.
Günay explains that the surging demand for bitcoin in February fueled the rest of the market:

"So much so that we have seen the fund that entered the market in the last 2 months raise the price of other cryptocurrencies every week. The trend, which began with the rise in prices of so-called Memecoins (Dogecoin and Shiba Inu, for example), led to huge increases in altcoins, including AI coins, RWAs, and DePin.

As a result, while $1 trillion of capital entered the cryptocurrency market in the first quarter, the total market value increased by 63% in the last 3 months, to $3 trillion. Bitcoin closed the first quarter at $71,000, with a 68% increase in value in that period. Bitcoin's quarterly close was also extremely important, as it fell above the peak area of previous periods.

The first quarter of 2024, which is interpreted as the first phase of the crypto market's bull season, will also be remembered as the period when the U.S. spot Bitcoin ETF was approved.

Will the tide turn in the second quarter?
The spot ETF market, which was greeted with great enthusiasm and perceived positively, allowed new money to enter the sector. However, price movements in March revealed that ETF trading comes with some risks as well as positives.

"ETF trading, which remained positive until last month, continued to support the price of cryptocurrencies, especially bitcoin. However, while there were rapid outflows from spot Bitcoin ETFs in March, Bitcoin's price was directly impacted by the negative outflow of funds and experienced weekly fluctuations of more than 10%. This can be considered as a factor that increases the external dependence of the cryptocurrency market, led by Bitcoin," says Günay.
Source: Cointelegraph