The year 2008 was when an anonymous individual or group of people with the pseudo - Satoshi Nakamoto, published a document with details of Bitcoin as a digital currency.

In that document, Nakamoto mentioned that the financial system had failed, necessitating the need for a new system. This is where Bitcoin comes in.

As a herald of a new way of handling financial transactions without the interference of third-party institutions, Bitcoin has surely made its mark in changing the narrative of finance and granting financial independence to millions of people around the world.

With another year of the Bull around the corner- popularly known as the Bull run, a season where different tokens and coins have tremendous price increases and the cryptocurrency market is filled with positivity and gains; the Trifecta of the halving, ETF Approval, as well as the FED pivot is something that's been on the mind of many cryptocurrency investors.

These three factors have a huge part to play in determining if we will have another Bull run or if it will be just another year in the cryptocurrency world. This is why this article will explore each of the Trifecta and how they can affect the price of $BTC as well as other cryptocurrencies.

The ETF Approval

Everyone who knows what's happening in the Cryptocurrency space at the moment knows the significance of the Bitcoin Exchange-traded fund (ETF) approval for the cryptocurrency industry.

What is this Bitcoin ETF?

Bitcoin ETF stands for assets that provide a simple and clarified method for investors to trade Bitcoin on conventional markets. Now that it’s been approved, BTC can now be traded on a traditional exchange, and not just on cryptocurrency exchanges.

Before BTC’s ETF approval, there were speculations that its approval would create a very bullish market as investors would now have easy access to Bitcoin, leading to more buy pressure for BTC.

The buying pressure speculated stemmed from the absence of complexity that comes with holding or owning BTC directly, as more institutions would already be exposed to it.

A typical consequence of this ETF approval was observed when Cointelegraph announced a fake ETF approval.

Almost immediately, Bitcoin surged across different trading platforms. On the Binance BTC/USDT market accounting for 8% of BTC 24-hour volume for example; BTC opened at $27,883 at 9 am ET and got to $30,000 - a 7% candle in about an hour.

To get another glimpse at the possible bullish run the ETF approval could bring for BTC, let’s take a look at Gold’s ETF approval history.

The historical analysis of Gold’s (XAU) price action following the years after Gold’s first ETF approval, it did over 250%.

In addition, a report by Bank of America shows that a $93 million inflow could trigger a Bitcoin price increase by 1%.

Thus, the ETF must attract 1.7% of the U.S. stock market’s $40.5 trillion cumulative value for BTC to double its price.

Bitcoin Halving

According to speculations, the Bull run comes in every 4 years after the halving of BTC.

The halving simply explains the rate at which new BTC gets into circulation after being cut in half.

The last halving happened in 2020 and was a major factor in the bull run of 2021.

If the halving comes in March 2024 as expected, it stands to reason that there will be a good run for BTC especially towards the end of 2024.

This is another bullish news for the cryptocurrency market.

The FED Pivot

A Fed Pivot occurs when the Federal Reserve, i.e. the U.S Central Bank reverses its policy outlook from expansionary (loose) to contractionary (tight) or vice-versa. This is mostly based on the economic conditions prevalent at a particular time such that the Fed can no longer keep working with its previous policy.

This policy aims to maintain stability of price and employment. Thus, everything the Fed does is with this dual mandate in mind. Once there is a rise in inflation- a rise in prices and reduced purchasing power leading to a unit of a currency being unable to purchase something that it could before such a time; and the rate of unemployment falls, the economy will be heated.

This necessitates the Fed to enact a tight, or contractionary monetary policy– increasing interest rates– all in a bid to slow economic growth and allow the economy to reboot itself and cool.

On the other hand, if inflation is low and there is high unemployment, this would require the Fed to enact a loose, or expansionary monetary policy to prevent recession– lowering interest rates– and pumping more money into the economy to ensure stability.

Based on whatever economic condition abounds per time, if there is a dramatic shift in the fundamentals of the economy, the Fed would then have to reevaluate its position and make a pivot– reverse its original monetary policy.

If interest rates have been low for a while during a quantitative easing (QE) (a means to purchase assets from the open market to spread more money into the economy and lower interest rates), the Fed would pivot by increasing interest rates and tapering (withdrawing the initial measures taken to spread money into the economy after the expected result has been achieved) its QE policy. A pivot in the other direction would be just the reverse of this and in either case, there are market expectations and business forecasts in the light of the new stance by the Fed.

Since 2022, until mid-2023, the Feds have exercised a tight monetary policy. However, research shows that there is a great likelihood of the FED exercising a loose monetary policy from next year –-lowering interest rates– allowing for economic growth as more people get to take loans and invest in the financial market.

Despite the transparent approach that the Fed has taken in recent decades in signaling to the public what it aims to do, a possible pivot is still all guesswork and a matter of expectations. If the Fed is slow to act or make a policy move that does not align with what the market expects, everything could change.

Guess this is an Achilles heel that we all have to watch play out.

Final Words

All of these major events happening next year tie the knot to determine if there will be liquidity inflow into the cryptocurrency market.

With less than 30% of BTC on exchanges, it wouldn’t take a lot for BTC to pump just as the research in this article asserts as well.

There are so many loose ends in heralding the bull run, but you can do something for yourself to ensure you are ready – start investing in long-term projects with value.

The rule remains –buy the rumor, sell the news, and of course –only invest what you can afford to lose.