Bitcoin, Ethereum and Tether Price Predictions: Are Cryptocurrencies Making a Quiet Comeback?

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Vault’s Viewpoint

• Major cryptocurrencies like Bitcoin and Ethereum are moving back into the area of near-historic highs.
• There are already spot Bitcoin ETFs approved by the Securities and Exchange Commission (SEC). But the first spot Ethereum ETFs might not be approved by the end of May, which could result in price setbacks.
• Regulatory uncertainty around cryptocurrencies could still cause uncertainty for future cryptocurrency prices, as well as a relatively low adoption rate by mainstream users and concerns about the economy.

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April Cryptocurrency Performance

After reaching a high above $73,000 in March, BTC ended just above $60,000 at the end of April. This represented a drop of a little more than 8% during April and was likely due in part to repositioning following historic highs. Since the end of April BTC has been trending upward, and BTC is up nearly 44% year-to-date.

Likewise, ETH saw a pullback in April, finishing the month below $3,000. In the wake of spot Bitcoin ETFs being approved in January, there was some hype around the possibility of spot Ethereum ETFs coming by the end of May, resulting in ETH moving above $4,000 in March. April saw some cooling off of sentiment, with a decline similar to BTC, at a little more than 8%. However, ETH is up nearly 31% year-to-date.

Bitcoin and Ethereum are the two largest cryptocurrencies by market cap, with Tether (USDT) the third-largest cryptocurrency, according to CoinMarketCap, an industry site that tracks cryptocurrency prices and other information. Tether is a stablecoin pegged to the U.S. dollar, so its price performance varies within a very narrow range. Tether is often used in cross-blockchain transactions to reduce the issues related to price volatility when converting from one token to another. As a result, the change in USDT price over April was negligible.

Recent Cryptocurrency Headlines

There have been some recent cryptocurrency headlines that have the potential to impact the cryptocurrency forecast going forward, and that might have you wondering which are the best cryptocurrencies to buy.

Bitcoin Halving

The most recent Bitcoin halving took place on April 19. Halving refers to the reward for validating a block of Bitcoin transactions being reduced by half. This halving takes place every time 210,000 transaction blocks are added to the blockchain. It’s a function of Bitcoin’s maximum supply of 21 million. Once 21 million bitcoins have been produced, no more new BTC will be added to the supply.

Some Bitcoin enthusiasts point to the limited supply as a reason that BTC will ultimately see price gains over time. The new reward for Bitcoin miners verifying transactions is 3.125 BTC, as opposed to the previous 6.25 BTC.

Bitcoin Runes

At the time of halving, a new protocol for creating and trading memecoins on the Bitcoin blockchain went live. These are a little different than non-fungible tokens (NFTs) that were so popular a couple of years ago. Instead, many of these memecoins are interchangeable and fungible. While the launch has some crypto enthusiasts excited for the prospect that this could mean a true entrance into the on-chain decentralized finance (DeFi) space, others have been concerned about the higher fees that increased usage of the Bitcoin blockchain could lead to.

Once the excitement dies down and fees stabilize, the hope is that Runes will be a step forward in DeFi, further helping keep crypto prices trending upward.

Spot Ethereum ETFs

Excitement over potential spot Ethereum ETFs has cooled somewhat, and that was reflected in the price in April. There are reports that the SEC is unlikely to approve the first wave of these applications, even though spot Bitcoin ETFs have been available since January 2024, after a court challenge. Concerns that the ETFs won’t be approved could weigh on cryptocurrency prices, although ETH prices would be more likely to see a greater negative impact than BTC prices.

Stablecoin Usage Controversy

Payment processor Visa collaborated with Allium Labs, a blockchain data provider, to create a dashboard designed to track stablecoin usage. While the volume of stablecoin usage appears to be on the rise, the results aren’t without controversy. At first blush, it appears that stablecoins like USDT are being used more in payment transactions. But it appears that only about 10% of stablecoin transactions are organic.

While this doesn’t impact the price of stablecoins, which are pegged to fiat currencies, it does speak to the level of adoption by mainstream users. For some, there are concerns about the support of cryptocurrency prices when widespread, regular adoption remains elusive.

Regulatory Uncertainty

One of the biggest issues surrounding the future of cryptocurrency is how the SEC will view cryptocurrencies. Back in 2015, the Commodity Futures Trading Commission (CFTC) ruled that digital currencies are considered commodities and should be regulated according to the Commodities Exchange Act (CEA).

However, in the years since, there has been a lot of speculation about how crypto assets should be regulated and viewed.

For example, the IRS considers how you got the cryptocurrency when determining how it should be reported on taxes. If you received a crypto as payment for services rendered, it’s considered income. However, if you buy a cryptocurrency on an exchange, it’s treated as property, similar to how a stock would be treated. Long-term and short-term capital gains rules apply when you sell the cryptocurrency.

It’s also possible that the SEC could classify different cryptos based on the type of function they serve. In 2020, the SEC filed a lawsuit against the cryptocurrency Ripple (XRP) claiming that it acted as a security, and the latest salvo is due May 6. Some expect a settlement by the fall of 2024.

The SEC has been busy filing other enforcement actions in various crypto asset matters. Many of the actions include accusing various crypto actors, including the exchange Kraken, of acting as an unregistered securities exchange. Many of these actions seem to indicate that the SEC is coming down on the side of cryptocurrencies being regulated more tightly as securities.

Is More Regulation Good or Bad for Cryptocurrencies?

Cryptocurrency forecasts might be impacted by whether increased regulation is considered a long-term positive or negative for the crypto landscape.

On one hand, some might argue that regulation is good, potentially bringing cryptocurrency closer to mainstream adoption, rather than being a fad. With regulation, there is a certain respectability that indicates that an investment might be legitimate. Some might perceive this as a good thing overall for cryptocurrencies that can stand up to scrutiny, while the digital assets that can’t will fail, leaving better choices for regular investors and ultimately supporting the prices of established cryptos like BTC and ETH.

The other side contends that regulation could potentially stifle blockchain and crypto innovation, slowing down development and eventually snuffing out these digital assets before they can truly take hold. Concerns remain that regulation could lead to less interest in crypto assets and lead to price drops.

Economic Concerns

Finally, economic concerns could potentially impact cryptocurrency price forecasts. When the economy is perceived as doing well, some investors are willing to experiment with what are considered riskier assets, such as BTC and ETH. When constraints come up, those with crypto assets might be inclined to sell for extra money.

On the other hand, some are starting to see BTC, in particular, as a hedge against inflation. If inflation numbers reported for May are disappointing, there’s a possibility that more demand for assets like BTC could support prices, and even push them higher. Many people will also be looking to future moves by the Federal Reserve to determine whether the environment will be conducive to more demand for crypto assets.

There’s a lot of uncertainty right now, and that includes in the realm of cryptocurrency. In general, cryptocurrency has been making a quiet comeback, without a lot of the hype seen in 2021, and it remains to be seen whether this comeback will be supported in the future.

Frequently Asked Questions

What Will Bitcoin Be Worth in 2025?

There’s no real way to predict any asset price, but an analysis by Spot On Chain, using Vertex AI, has predicted a 63% chance that BTC will reach $100,000 by 2025.

What Are Cryptocurrencies Worth Today?

Like many other assets, cryptocurrency prices are based on a number of factors, including demand, market conditions and perceptions of the economy. There are also different cryptocurrencies, each with its own price. It’s important to carefully consider your goals and portfolio strategy before including cryptocurrencies.

What Is the Best Crypto to Buy Now?

The best crypto for you depends on your portfolio strategy. In general, BTC and ETH are considered the “blue chips” of cryptocurrencies. They have the largest market share of the crypto market, and the two highest market caps. Other cryptos with relatively high market caps include Binance Coin (BNB) and Solana (SOL). Stablecoins like USDT and U.S. Dollar Coin (USDC) also have high market caps, but they are pegged to the dollar and don’t see price increases.

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