This is a collaborative post.

2023 was an exciting year for the financial markets, and to many, the year was the end of an era for most asset classes. 2024 promises to be an exciting year in sectors like crypto, and what happens next year can make or break the long-term prospects of this market. Elections in key global economies like the US and UK will play important roles in how some major markets make rules and changes to battle inflation. Today, we’ll look into what we can expect in 2024 and how to better prepare for the new reality.

Forex Market

External (geopolitical) events beyond its control affect the global Forex market. For example, this market was heavily influenced by two major global wars in Europe (Ukraine & Russia) as well as the Middle East (Palestine & Israel). Additionally, the Federal Reserve Bank in the US has increased interest rates by more than 5% in less than two years, undermining the growth and strength of the US Dollar and other affiliated currencies.

In the UK, the Bank of England has increased rates 14 consecutive times, and interest rates in the country currently hover around 5.25%. The European Central Bank began interest rate hikes in mid-2022.

Many market stakeholders believe that most economies globally are ready for interest rate cuts, and whether or not Central Banks across the world cut rates will play a huge role in how the market progresses in 2024. Furthermore, geopolitical stability will also play a role in the market, as another significant war will definitely harm the global forex market. A third possibility for 2024 is a worldwide recession; many stakeholders believe that a recession induced by interest rates is a real possibility next year. By choosing the best forex broker 2024 could become a more successful year.

Stock Markets

Coming into 2023, there weren’t massive Expectations for the financial markets, growth projections were down, and fears of a global recession were high. Ultimately, considerable fiscal stimulus packages in Europe and the USA and China’s “full economic reopening” helped the global economy post positive results during the year. 2022 was an abysmal year for the S&P 500 in the USA, losing about 20% of its value; meanwhile, the market has recovered a considerable amount of the lost value in 2023.

In its recent 2024 market outlook, JP Morgan shared its expectations for economic demand and inflation to “soften” during the year. Ultimately, the bank feels that if its predictions come to pass, it’ll pose a threat to the economy, leading to worry among investors.

Without a significant reduction in interest rates and quantitative tightening, it’ll be hard for the economy to witness substantial growth. It goes without saying that a reduction in interest rates can lead to increased inflation, which can result in a recession. JP Morgan predicts the S&P 500 hitting 4,200 in 2024 while growing at 2–3%. It’ll be interesting to see how stock markets globally behave in 2024, but nothing is certain.

Crypto Market

Over the past few weeks, avoiding the stories from the cryptocurrency ecosystem has been almost impossible. Bitcoin began an unexpected rally in November that helped prop up a considerable amount of altcoins in the crypto space. 2022 was a year to forget for cryptocurrencies, and the growth in 2023 was expected because when a market is as down as this market was coming into the year, the only direction is up. The crypto market growth so far has been extraordinary, and almost every crypto is up over the past six months, but most people are asking if this growth can be sustained in 2024.

The expectations of Bitcoin Spot ETF approvals in 2024 have driven Bitcoin and the entire cryptocurrency market’s growth in recent weeks. Suppose Bitcoin ETFs get approval in the USA. In that case, it’ll result in a considerable number of countries also doing the same, and Spot ETF approvals will enable new money from (previously) restricted institutions to enter the crypto market. 2024 promises to be an exciting year for Bitcoin and the crypto sectors, and it’ll make sense to back the success of cryptocurrencies.

What To Look Forward to

2024 promises to be a positive year for the cryptocurrency sector. However, if Bitcoin ETFs fail to earn approval in the US, the industry can quickly lose all the positive momentum it has gained over the past few months. 

Expectations for the stock market in 2024 are positive but low, and although minimal growth is expected, there’s a considerable amount of room for things to go wrong within this market.

Finally, the global forex market is due for growth, but the growth isn’t guaranteed after an extended period of underperforming. Investors in this sector are encouraged to keep expectations low while diversifying their portfolios to reduce risks.