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Market Pulse - Q4'23

Primers

In the fourth quarter of 2023, prominent asset classes witnessed a positive quarter in terms of prices, with the Nasdaq Crypto Index (NCI) surpassing traditional risky assets like the S&P 500 and the Nasdaq 100. This indicates the growing maturity of cryptocurrencies as an asset class. Bitcoin (BTC) and Ethereum (ETH) both showed impressive returns with relatively lower volatility, suggesting a trend towards a more mature market.

Bitcoin was once again the highlight of the period and its positive price movement was backed by robust network activity, anticipation of the upcoming halving event, and progress towards the launch of a Spot ETF in the US. Ethereum, although trailing behind Bitcoin in terms of performance, maintained a strong position compared to other major asset classes, bolstered by an increasing user base and its deflationary nature.

Our year-end report introduces two critical charts for future market analysis. The first charttracks Bitcoin's performance across different halving cycles, offering potentially predictive insights into its evolving market behavior. The second chart uses a logarithmic regression to show the sum of Bitcoin and Ethereum 'fair’ market cap’ providing insights into long-term market trends and sentiments. 

Overall, our analysis emphasizes the positive trajectory of digital assets, particularly Bitcoin, as we look forward to regulatory developments, and ongoing growth in institutional adoption and innovation in 2024. For a detailed forecast and insights into the crypto market's future, we also recommend our recently published Crypto Outlook 2024.

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