Crypto's "rebound" rally in July looks hopeless? These major catalysts could drive a market turnaround
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Crypto's "rebound" rally in July looks hopeless? These major catalysts could drive a market turnaround
As investor confidence suffers a severe blow, the crypto market is seen as potentially turning around starting in the fourth quarter of 2024, supported by multiple favorable factors including FTX's $16 billion repayment plan, rising expectations of interest rate cuts, and the outcome of the U.S. presidential election.
Navigating Web3 tides with focused insightsBy Nancy, PANews
After enduring the traditionally weak months of May and June, the cryptocurrency market failed to rebound in July as hoped. Instead, bearish events such as the German government's bitcoin sales and Mt. Gox repayments have intensified investor panic, dragging down Bitcoin and triggering broad declines across the crypto market.
Amid this blow to investor confidence, a confluence of bullish factors—including a potential $16 billion FTX repayment plan, rising expectations for interest rate cuts, and the outcome of the U.S. presidential election—suggests the crypto market could see a turnaround starting in the fourth quarter of 2024.
$16 Billion FTX Repayment Plan Could Drive Market to New Highs
According to FTX’s revised reorganization plan and disclosure statement filed with the U.S. Bankruptcy Court for the District of Delaware in May, the company has collected, converted into cash, and made available assets valued between $14.5 billion and $16.3 billion—surpassing the $11 billion owed to customers and other non-government creditors. The surplus will be used to pay interest to over 2 million FTX customers.
If approved by the court, debtors expect that approximately 98% of FTX creditors will receive about 118% of their allowed claim amount within 60 days of the plan’s effective date. However, due to disagreements among creditors, consensus on the repayment method has not yet been reached.
FTX has now received court approval allowing creditors to vote on whether compensation should be paid in cash or in-kind (cryptocurrency). According to court documents, voting must be completed by August 16, and Judge Dorsey is scheduled to rule on whether to approve the plan on October 7. If approved, FTX will begin repaying creditors within two months. Based on this timeline, repayments are expected to occur between the fourth quarter of 2024 and the first quarter of 2025.
Although the final payout structure remains undecided, crypto analyst Ash Crypto believes that since most FTX customers are crypto enthusiasts, the influx of $16 billion into the crypto market could become the biggest catalyst for price increases—potentially pushing Bitcoin above $120,000, Ethereum beyond $12,000, and many altcoins up by 10x to 50x.
Rate Cut Expectations Rise, September Hike Odds Drop Below 70%
Federal Reserve interest rate hikes and cuts are key drivers of Bitcoin prices, with rate cuts typically fueling market strength.
Recently, Fed Chair Jerome Powell stated that while inflation pressures in the U.S. have eased somewhat, the central bank still needs more data to confirm that inflation risks are fully under control. Cutting rates too early could reignite inflation, while waiting too long might slow economic growth and trigger a recession.
Despite Powell’s caution, recent U.S. economic indicators suggest a slowdown—such as the significant downward revision of June’s nonfarm payroll data and the unemployment rate rising to 4.1%, the highest since November 2021—fueling growing market expectations for rate cuts.
For example, Citigroup Research analysts project that the Fed will begin cutting rates by 25 basis points at each meeting starting in September, totaling eight cuts through July 2025. This would reduce the benchmark rate by 200 basis points—from the current 5.25%-5.5% down to 3.25%-3.5%—and hold steady for the remainder of 2025. QCP Capital also noted in its latest market analysis that downward revisions to April and May employment data support Powell’s disinflation narrative and increase the likelihood of earlier rate cuts, boosting odds for cuts in both September and December. Additionally, during the latest FOMC meeting, seven out of 19 officials projected one rate cut in 2024, while eight supported two cuts.
According to CME Group’s FedWatch Tool, as of July 9, markets assign a 73.6% probability to a rate cut at the September FOMC meeting, compared to just a 22.9% chance of no change.
U.S. Launches First-Ever Crypto Accounting Rules, Effective 2025
In December last year, the Financial Accounting Standards Board (FASB) released its first-ever accounting rules for digital assets. Under the new standards, companies holding Bitcoin or Ethereum must record these assets at fair value, with changes in value reflected directly in net income. The rules apply to fiscal years beginning after December 15, 2024—meaning they will take effect for both public and private companies in 2025.
For crypto assets, this accounting shift means firms like MicroStrategy, Tesla, and Block will now be able to reflect the peaks and troughs of their crypto holdings directly in financial statements. Under the new rules, companies must report cryptocurrencies at fair value—their current market price—and any fluctuations in value will flow directly into net income.
MicroStrategy founder Michael Saylor commented that this move will encourage global corporate adoption of Bitcoin as a treasury reserve asset. Former PayPal president David Marcus also praised the development, stating it removes a major barrier for companies adding Bitcoin to their balance sheets and marks a significant milestone for Bitcoin.
Trump’s Lead Rises, Cryptocurrency Becomes a Key Election Issue
2024 is an election year, and the U.S. presidential race has drawn global attention, with the general election set for November 5. Cryptocurrency has emerged as a pivotal issue: Donald Trump has expressed strong pro-crypto sentiments, even declaring his ambition to become the “crypto president,” while the Biden administration has followed with friendlier signals. This political shift is seen as positive for the development of the crypto market.
Currently, speculation over Biden stepping aside continues to grow, with several Democratic members of Congress urging him to withdraw, and Senator Warner leading efforts to push for his exit. Although Biden has publicly refused, his performance in the first televised debate significantly boosted Trump’s perceived chances. Moreover, in fundraising for Q2, Trump raised $331 million—surpassing Biden and the Democratic National Committee’s combined total of $264 million.
A Trump victory is widely believed to inject fresh upward momentum into the crypto market. Standard Chartered stated that August 4 is a critical date for Biden’s decision-making; if he steps down, it could pave the way for more crypto-friendly policies, potentially driving Bitcoin to new highs and forecasting a price target of $200,000 by 2025.
Additionally, the Republican National Committee included pro-crypto measures in its official 2024 platform. A recent policy document from Trump’s campaign outlined the GOP’s “Make America Great Again” agenda, pledging to end what it calls “unlawful and un-American attacks” on the U.S. crypto industry. It promises to “defend the right to mine Bitcoin,” allow crypto holders to self-custody their assets, and oppose the creation of a central bank digital currency (CBDC). The document states, “We will defend the right to transact without government surveillance and control.”
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