Despite predicting that the long-anticipated U.S. recession will finally hit next year, investment manager VanEck still expects Bitcoin to hit all-time highs by the fourth quarter due to the approval of spot ETFs and the upcoming halving event, according to a new report.
VanEck analysts Matthew Sigel and Patrick Bush expect the U.S. economy to succumb to a recession in the first half of 2024 as economic momentum slows and inflation cools, making it more vulnerable to shocks. However, analysts also expect more than $2.4 billion to flow into U.S. spot Bitcoin ETFs in the first quarter, pushing prices higher if approved.
VanEck believes the fact that spot Bitcoin ETFs trade at spreads of around 0.1% and are commission-free at many brokerages will drive demand.
The Securities and Exchange Commission has not yet approved a spot Bitcoin ETF in the United States, having previously approved futures-based funds in 2021. The next deadlines for the SEC’s decision to approve, deny or postpone applications from companies including VanEck and BlackRock are as follows: Bitwise, WisdomTree, Invesco, Fidelity, and Valkyrie are expected to decline in mid-January. Bloomberg analyst James Seyffart recently said the potential spot Bitcoin ETF approval window is likely to take place between January 5 and January 10.
Bitcoin Halving and All-Time Highs
bitcoin BTC
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The fourth halving, in which block rewards are halved, is expected to occur in April and will be another potential catalyst, with previous halvings outpacing the cryptocurrency’s significant gains in 2016-2017 and 2020-2021. VanEck analysts expect the event to pass with “minimal drama,” with Bitcoin rising above $48,000 after the halving and miners experiencing little trouble thanks to a much-improved balance sheet.
Number of days since Bitcoin cycle peak. Image: VanEck.
Analysts expect Bitcoin to surge past a “presidential-sized wall of worry” in a US election year, reaching all-time highs by November and reaching its final cycle peak of up to $160,000. “I guarantee that if Bitcoin reaches $100,000 by December, Satoshi Nakamoto will be named Time magazine’s ‘Person of the Year,’” they added.
Cycle price peak. Image: VanEck.
Bitcoin is currently trading at $44,006, up 165% year-to-date, according to price data from The Block.
BTC/USD price chart. Image: Block/TradingView.
Ethereum will not overthrow Bitcoin, but Solana will continue to outperform
Sigel and Bush said Ethereum will not overturn Bitcoin’s market cap in 2024, but will outperform large-cap tech stocks, especially as Bitcoin’s regulatory status becomes more clear. As with past cycles, VanEck expects Bitcoin to lead the rally next year, while Ethereum won’t start performing well until after the halving. But there will be no “reversal,” they said.
that much 
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The :BTC price ratio is currently around 0.05, close to its lowest level since July 2022.
ETH:BTC price ratio. Image: VanEck.
Analysts have argued that Ether will also lose market share to other smart contract platforms with less uncertainty surrounding scalability, such as: Solana 
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. They also expect Ethereum Layer 2 like Polygon, Arbitrum, and Optimism to consolidate into two or three dominant players depending on value and usage. For one, it achieves higher monthly DEX volume and total value peg than Ethereum for the first time.
VanEck expects Solana to become one of the top three cryptocurrencies by market capitalization by 2024, behind Bitcoin and Ethereum. This is fueled by increased DeFi activity on the blockchain, joining the “spot ETF war” with the top two digital assets.
Binance lost its top spot and NFT activity rebounded.
VanEck analysts also expect Binance to lose its crown as the top cryptocurrency exchange by spot trading volume in 2024, following a $4.3 billion settlement with U.S. authorities and a year of platform regulatory issues.
Analysts expected decentralized exchanges’ share of spot market trading volume to hit a new all-time high compared to centralized exchanges, although they argued that one of OKX, Bybit or Coinbase would take the top spot.
Additionally, Sigel and Bush expect NFT activity to rebound next year and hit record highs as speculators flock to the top collections of Ethereum and new Bitcoin-based products. They also expect groundbreaking blockchain games to finally be released.
Bitcoin and Ethereum NFT volume. Image: VanEck.
Among VanEck’s other expectations for next year, analysts said stablecoin market capitalization has hit an all-time high as USDC reverses its market share losses this year and the DeFi industry aligns with the idea of know-your-customer (KYC) capabilities. On their front end.
It is important to note that VanEck may hold positions in any of the digital assets mentioned.
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