Why Is the Crypto Market Rising Today?

The cryptocurrency market observed a strong recovery in 2023 after witnessing a slump, amid uncertsinty in the global macroeconomic situation. The year 2024, though, has seen Bitcoin, the largest cryptocurrency, rise to above $68,000 in March and hit a new all-time intraday trading high on March 5, topping the unprecedented $69,000 level.

The entire crypto market’s capitalization stood at $2.52 trillion as of March 5, 2024, helped by huge inflows of capital after the U.S. Securities and Exchange Commission’s approval of Bitcoin Spot Exchange Traded Funds (ETFs). 

The two largest cryptocurrency coins by capitalization, Bitcoin and Ethereum, have shown strong increases from the beginning of 2024. This has led to hope among crypto investors for Bitcoin to keep rising until the halving event, which is expected to take place in April 2024 and may lead to a price increase.

Let’s have a look at the reasons that have turned the cryptocurrency market hopeful in 2024, and what investors can do in response.  

Crypto Markets’ Spectacular Performance 

Overall, the crypto market has shifted from the losses incurred in 2022 and 2023 to a rise led by the world’s largest cryptocurrency, Bitcoin, which has been climbing exceptionally since October 2023 and is currently hovering around its record levels, not seen since late 2021.

This rise comes after a surge of interest by retail investors in spot Bitcoin ETFs (Exchange-Traded Funds). For example, net inflows into those U.S.-based Bitcoin ETFs hit a volume of around $562 million on March 4 alone, according to crypto news site Cointelegraph. The much-anticipated Bitcoin halving event, set to take place in April this year, is also leading to increased demand for BTC on the expectation that the cryptocurrency’s price may rise as a consequence.    

The second-most popular coin, Ethereum, is also on the rise. ETH has jumped by almost 70% to $3,976 so far this year. While it’s still quite a way off from its peak of $4,644 in November 2021, it should be noted that in March 2023 it was at just $1,500.

Performance of the Most Popular Cryptocurrencies

(As of March 4, 2024)

What Lies Ahead For the Crypto Market? 

The current surge in prices indicates the cryptocurrency market may be set for new records this year. The question that lies ahead is whether we are witnessing a true bull market in cryptos or a short-lived surge. To frame the question, it’s important to consider the history of key crypto coins such as Bitcoin, where volatility has been the most relevant factor.

Bitcoin reached its record in 2021 before slipping, like other cryptos, into a prolonged slump. By the start of the 2022, Bitcoin prices had sunk by 42% from their highs. The kind of volatility Bitcoin prices are experiencing now isn’t new, and there is no guarantee that this year will not show the same kind of ups and downs that BTC and other cryptos have shown in the past.

Investors must remember investing in any asset class comes with risks, including the loss of invested capital, and cryptos are especially risky.

Crypto Market Capitalization

How To Invest in Crypto

The most important aspect to remember before investing in any cryptocurrency is that the crypto market is highly volatile, and therefore may be riskier than investing in more established assets such as stocks. In any case, putting all of your capital available for investment into cryptocurrencies would be unwise given the high levels of volatility.

If you’re looking to invest in cryptocurrencies, the best bet is to do thorough research and analysis before investing. Here’s how you can invest in crypto coins by following key steps:

Step 1: Understand and do your research on the current crypto market and its risks.

Step 2: Choose the amount you’re willing to invest.

Step 3: Choose the cryptocurrency you want to invest in.

Step 4: Choose a crypto exchange platform for your investment. 

Step 5: Make your own account on the crypto exchange platform you’ve chosen.

Step 6: Complete the verification and know your customer (KYC) process.

Step 7: Fund your crypto account, and you’re good to trade your desired crypto coin.

Step 8: Choose a crypto wallet to store your cryptocurrency. There are multiple digital wallets like mobile wallets, hardware wallets, desktop wallets and online wallets. Learn more about the best crypto wallets in India.

Step 9: Secure your wallet.

Step 10: Like with other investments, you can hold your cryptocurrency, sell to make a profit, or buy more.