Contents

  • 1 Adoption of a spot ETF for Bitcoin
  • 2 The successful transition of Etherium to Proof-of-Stake
  • 3 The US Federal Reserve’s reversal of course
  • 4 Massive adoption of the major cryptocurrency
  • 5 Integration of Bitcoin as a means of payment in a major company

Adoption of a spot ETF for Bitcoin

As a reminder, ETFs are exchange traded funds, that is, in fact, market-based instruments that are convenient for large investors. Last year, the Securities and Exchange Commission (SEC) approved several Bitcoin ETFs at once, but all of them are based on cryptocurrency trading derivatives in the form of futures.

Bitcoin ETFs

A spot ETF, on the other hand, would be based specifically on the market price of Bitcoin. The very fact of its adoption will give much recognition to BTC as a legitimate asset for large investments, so many will want to get in touch with it amid “approval” from the regulator.

The SEC has been rejecting applications for spot ETFs for several years now, but if the Commission changes its decision in the future, it will boost trading activity and increase the likelihood of new investments in the industry as a whole.

Etherium’s successful transition to Proof-of-Stake

The transition to the second version of the Etherium protocol has been an expected development for the last five years, at least because it should have been done years ago. The day before, the project team conducted another successful test of the migration on its test network, with the upgrade already in the main network due to take place relatively soon.

Specifically, here's a tweet in which the author reported on the successful launch of the upgrade on the Sepolia test network. After that, another testnet called Goerli is left, and then the so-called merge will be carried out on the regular Ethereum network as well.

According to Cointelegraph journalists, if the transition goes through without further complications, it could generate more activity and interest in the altcoin from market players. Etherium will also become much more convenient and efficient in terms of fees for both customers and developers of decentralised applications. All of this will contribute to a sharp increase in capital inflows to the industry, experts suggest.

It should be noted that not everyone thinks that abandoning mining and the Proof-of-Work consensus mechanism is a good idea for the developers of Etherium. Be that as it may, a major upgrade of the second largest cryptocurrency by market capitalisation will indeed be a landmark event - at least given the huge amount of funds that users and investors hold in ETH.

A change of heart from the US Federal Reserve

“Don’t try to fight the Fed” is already a well-established wisdom among many investors that explains the influence of one of the world’s most important financial institutions on what’s happening in the economy. This year the Fed has begun to aggressively raise the benchmark lending rate – and this after years of easy money policy by massively issuing the US dollar to combat the crisis around the COVID-19 pandemic.

The decision to raise lending rates was not an easy one, but it is necessary to combat rising inflation. However, it also has negative consequences. Usually a rate hike is bad for the stock market: major stock indices begin to fall quickly, as it is now harder to borrow large amounts of capital for investment.

Inflation in the US

The crypto market has been held hostage to the situation – due to its strong correlation with the price dynamics of securities, it is also falling after the Fed’s decisions. At the same time, many experts believe that the Fed’s policy is the main reason for the current crypto crisis. Sooner or later, the US Federal Reserve will have to change course, which could provide relief to investors. Then Bitcoin will become an attractive investment option again.

Mass adoption of the major cryptocurrency

In 2021, Bitcoin became legal tender at the national level for the first time in El Salvador, a small country in Central America. The very fact of such massive acceptance has done much to popularise the major cryptocurrency – and that’s even despite the fact that El Salvador is now suffering losses due to government investment in BTC.

Specifically, here’s a list of countries that are supposedly considering making Bitcoin an official tender.

However, if El Salvador manages to show early successes in the economy precisely because of the legalisation of crypto, there could be many more governments around the world willing to join the crypto revolution. And that's another reason for the market to grow further.

Integration of Bitcoin as a means of payment in a large company

Bitcoin is not yet used by most people in everyday life for one simple reason – the cryptocurrency has few places to spend it conveniently and quickly. Apart from its legalization, basic integration of BTC into major payment systems or the ability to pay with it for popular goods and services would already do a lot for the coin.

For example, Elon Musk has already approved Dogecoin (DOGE) as a means of payment for tunnel tolls from The Boring Company. With that in mind, some Tesla owners will surely be interested in cryptocurrencies.

The power of Bitcoin


We believe that the main reason to change the negative situation within the cryptocurrency market will still be the Fed and the resolution of current geopolitical conflicts. Investors will then have a renewed appetite for investments, as at least a stable or declining rate will contribute to this. However, in order to do so, rising inflation would first have to be beaten.

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