4 catalysts that could drive bitcoin's next big rally

• Bitcoin has rallied more than 60% in 2024, driven by January's spot ETF approval and the recent halving event.
• Developers have been working to add functionality to the bitcoin network, which could drive price upside.
• The red-hot crypto could also get a boost from interest-rate cuts, loosened regulation, and November's election.

Bitcoin has achieved records this year thanks to two catalysts: January's spot ETF approval, and the recent halving event. The red-hot crypto was up more than 60% year-to-date on Friday, trading about 6% off all-time highs reached in March.

While both drivers are expected to keep pushing bitcoin's price higher, they're now in the rear view, and investors are wondering where to look for more upside. According to analysts, there are plenty of ways bitcoin's price could continue to climb.

Detailed below are four upcoming catalysts:

1. Interest-rate cuts

Investors are focused on the Federal Reserve's outlook for rate cuts, in anticipation that stocks could rally as a result. The same dynamic holds true for bitcoin, which has traded like a speculative asset that appreciates when borrowing costs are lower.

In fact, 2021's ultra-low interest rates were largely what pushed bitcoin to a record that year. The rally then reversed when the Fed started its monetary tightening campaign.

"In the first quarter, we had the halving coming in, but mostly we had this huge adoption of the ETFs. So as that gets priced in, now you're looking for what the Fed can do," Galaxy CEO Mike Novogratz told Bloomberg earlier this month.

Until short-term interest rates do decline, bitcoin will likely keep to a range of $55,000 to $73,000, he said.

2. Shifting regulation

At this point, the crypto community is also looking for coherence on the regulatory front, which has proven itself to be a frequent obstacle for bitcoin. For instance, the eventual approval of spot ETFs by the Securities and Exchange Commission was preceded by a loss in court.

But legal sentiment around crypto seems to be adjusting. One future bitcoin catalyst could be the looming stablecoin bill, Oppenheimer executive director Owen Lau told CNBC in early May. It could come as soon as this year.

Meanwhile, the US House of Representatives just passed a wide-sweeping regulatory framework for the crypto industry, which is being hailed as a win for the sector. Though its fate is unclear in the Senate, this would offer the cryptosphere clearer rules.

3. November's election

But real regulatory clarity will come after the presidential election, Novogratz said. He noted that Republican candidate Donald Trump has been a growing voice of support for the industry, in contrast to President Biden's policies.

In a May note, Standard Chartered's Geoff Kendrick also said that a Trump victory would be broad positive for bitcoin. 

He added that increased worry around the US deficit and debt trends will also likely boost bitcoin, as investors will start seeking alternative investments. This could happen under both candidates, as neither has offered a plan on how to tackle government spending, Kendrick said.

4. Expanded use

While outlooks on bitcoin are changing, the cryptocurrency itself is undergoing a remake of sorts. 

According to Bloomberg, developers have been hard at work to add functionality to the bitcoin network. These efforts look to make the crypto more than just a speculative asset to hold and, with projects quickly coming online, could offer another catalyst.

For instance, the recently-released Ordinals protocol allows users to store more than just bitcoin on the BTC blockchain, but start trading assets such as nonfungible tokens. Already, the Ordinals market saw daily trading volume reach $3.42 million in mid-May, Bitget Managing Director Gracy Chen wrote on X.

"The advent of Ordinals on Bitcoin in 2023, the subsequently created BRC-20 token standard, and now the Runes token standard, have helped drive interest in thinking of Bitcoin as a platform network, not just a monetary network," Galaxy wrote in a note. And now, such projects are attracting considerable attention from venture investors, it said.