How is the crypto market evolving during Q1 of 2024?

In recent months, various macroeconomic factors have affected the global finance markets across different regions, highlighting diverse economic scenarios in Asia, Europe, and the US, among other regions.

According to data provided by the OECD, global economic scenarios are growing modestly, showing a slight improvement compared to previous years, with a projection of global GDP growth of 3.1%.

However, it seems that the startup industry is not following the economic improvement that the global economic markets are experiencing from a macro perspective.

During the last few months, funding within the technology market has shown a complex situation, where in general terms, funding within the startup industry has fallen compared to previous years.

Crunchbase reported that funding for startups globally in the first three months of 2024 reached 60 billion dollars, one of the lowest amounts recorded since 2018.

A clear example of the complex situation of the technology market in general has been the recent mass layoffs internationally by companies such as Google, Microsoft, and Amazon, among others.

Pavel Zavadskii, founder of Biqutex, added “Despite a significant increase in venture capital funding compared to last year, VC investment in crypto is still far below 2021 bull market levels. The main factor is the Fed’s continued tight monetary policy and market participants’ uncertainty about the timing of the start of the next rate cut cycle.”

The crypto VC funding rises

The crypto market has been considered one of the fastest-growing markets in recent years. It has gone through various stages from the boom in 2021 during the COVID era, to a strong fall with the beginning of the crypto winter, and it seems that Q1 of the year has brought a positive trend for the international cryptocurrency market.

Having finished the recent Bitcoin Halving and with mixed feelings, hoping that this will be a better year for the crypto market, it could be an exception within the complex situation that the technology market is facing globally.

According to information provided by Bloomberg, VC funding in crypto reached 2.5 billion dollars during the first quarter of the year, showing an upward trend of 32% about the same period last year.

What factors from a micro perspective are driving growth on a macro scale of the crypto industry?

There have been various events internationally that have positively impacted the cryptocurrency market. In January, the SEC approved the first Bitcoin ETF, marking one of the first positive events for the crypto market.

Likewise, data provided by Statista reflect the growth of the crypto market, indicating that the crypto market will continue to grow at a compound annual rate of 8.62%, projecting earnings of 71.7 billion dollars for 2028.

The recent Bitcoin Halving, along with the approval of the first crypto ETFs in Asia, and the possibility that the Fed will not raise interest rates, are impacting the crypto market in macro terms, boosting the increase in funding.

In other words, small individual events in micro terms are helping to drive a sentiment of positivism and growth within the global crypto market.

– Juan Allan

CATEGORIES
Share This

COMMENTS

Wordpress (0)
Disqus (0 )