​Cryptocurrencies started very promising in 2024, with the approval of the first spot Bitcoin ETFs on 10th January. In anticipation of a possible approval, Bitcoin started to surge in December 2023, which also led to price increases for other cryptocurrencies. Shortly after the approval, the much-anticipated Bitcoin Halving further boosted the ecosystem with a particularly strong performance in March 2024. The Bitcoin Halving took place in mid-April, leading to a slight dip in the market. Historically, this is a common occurrence, with most of the gains occurring ahead of the event, followed by a period of “selling the news” or profit taking, leading to slight declines. In addition, several ETF providers also applied for approval of spot Ether ETFs following the approval of Bitcoin ETFs. Until mid-May 2024, the chances of approval were almost unanimously seen as close to zero. However, when the SEC set a deadline for the decision, the view on a potential approval quickly changed. A few days later, the SEC released a statement confirming the approval of spot Ether ETFs on 23rd May 2024. Figure 1 shows the price of Ethereum from 2023 to the present and its performance since then. Most of Ethereum's gains this year have come from the very strong February and March, with another significant spike when the SEC released the statement on the ETF approval deadline. At the time of writing, ETH is trading at $3.8k with a market capitalisation of $463bn.

​Inflation remains a key contributor to global risks, particularly in the US. Since June 2023, inflation has fallen below 4%. While this initially looked promising, inflation has never fallen below 3% and remains sticky. As a result, most market participants expected the Fed to cut rates several times during 2024. Recent developments have changed these expectations dramatically. At its most recent meeting, there was a significant chance that the Fed would even raise rates again. At its meeting in early May 2024, the Fed is holding its rate between 5.25% and 5.5%. While rate hikes are less likely in the near term than before the May meeting, some economists do not see a cut before 2025. Whether interest rates are lowered is increasingly dependent on the US labour market. With its current strength, the economy can tolerate higher interest rates. If the labour market shows signs of trouble, cuts are likely to come sooner than expected. While inflation will remain a key criterion for such a decision, the focus seems to have shifted to the labour market. Figure 1 shows the development of inflation and interest rates in the US, the EU, the UK, and Switzerland.
In the EU, inflation has been on a healthier decline. Inflation in the EU has fallen to 2.6% in March 2024, the lowest level since the start of the inflation spike. Interest rate cuts now seem much more likely in Europe than in the US. Even in the UK, inflation is coming down to manageable levels and the BoE has hinted at earlier cuts than previously thought. Switzerland, which has been unique during soaring inflation, was even able to already to lower its interest rate from 1.75% to 1.5% in March 2024.