As the sector matures and diversifies, what pivotal trends are on the horizon for 2024 and beyond? Let’s delve into some forecasts that could shape the future landscape.
1. Riding the crypto wave
The cryptocurrency market, like most financial markets, works in cycles. With the next Bitcoin halving date expected in April 2024, a surge in market activity could follow, potentially leading to a new all-time high by 2025. This pre-programmed event in the Bitcoin network occurs approximately every four years, following the mining of 210,000 blocks. The upcoming Bitcoin halving will see block rewards slashed from 6.25 Bitcoin to 3.125 Bitcoin. Such diminished supply, alongside burgeoning demand for Bitcoin, typically fuels scarcity-induced price surges.
Standard Chartered Bank’s bitcoin prediction, as reported in CoinDesk, is that the cryptocurrency will reach USD 100,000 by the end of 2024. This surge is expected to be propelled by the green light for several US-based spot Bitcoin ETFs, which, as stated by the bank’s Geoff Kendrick, are “likely to come sooner than expected”.
Beyond the next Bitcoin halving and the potential introduction of ETFs, various other factors are thought to potentially spur a crypto bull run, including:
- Institution investment. Banks and major institutions are poised to allocate assets to cryptocurrencies, potentially injecting new liquidity into the market.
- Mass adoption projects. A crypto bull run could attract a record number of new users to emerging projects, fostering widespread adoption across the crypto landscape.
- Transition to Web3. The shift from Web2 to Web3, illustrated by examples like Nike’s NFT marketplace for SWOOSH sneakers, emphasises decentralisation, data ownership, smart contracts, trustless transactions and interoperability among applications and ecosystems. This will bring a broader audience to crypto.
2. Upswing in crypto payments
2024 could also usher in increased acceptance of crypto payments across various sectors, from consumer goods to services, accompanied by the proliferation of crypto payment gateways. As per a Deloitte business report, a growing number of businesses are recognising cryptocurrencies as legitimate payment modes. This upsurge in crypto payments results from advancements in technology, user-friendly payment systems, and increasing confidence in the security measures provided by blockchain. These innovations significantly facilitate the integration of cryptocurrencies into daily transactions.
Reported by The Block, Xapo Bank CEO Seamus Rocca highlights the rapid grassroots adoption of a crypto economy in Argentina and Mexico, despite Latin America having a smaller such economy compared to other regions. Xapo Bank, known for its crypto-friendly approach, enables secure and efficient cross-border transactions of Bitcoin and stablecoins, as well as the opportunity to grow BTC with 1% annual interest at no risk.
3. Metaverse boom
The metaverse, an immersive digital world, is also believed to be on the cusp of an explosion in 2024. By 2030, growth projections indicate an unprecedented tenfold increase compared to the current cryptocurrency market, as depicted in the infographic below. Dubai is leading the charge with its metaverse strategy, aiming to quintuple the number of blockchain and metaverse companies over the next five years. This ambitious plan seeks to establish more than 40,000 virtual jobs by 2030, drawing in over 1,000 companies specialising in blockchain and the metaverse. The involvement of tech giants such as Microsoft, Apple and Amazon further solidifies the onset of a transformative era in this space.
4. Regulatory clarity in the crypto sphere
2024 is also expected to bring increased regulatory clarity within the crypto markets, fostering confidence among institutional investors regarding industry legitimacy and safety. There’s a possibility that the US might lag behind Europe, which recently implemented the Markets in Crypto-Assets Regulation in mid-2023. This legislation aims to regulate distributed ledger technology and virtual asset usage within the European Union, prioritising user and investor protection.
5. Progress in asset tokenisation
Colin Butler, Global Head of Institutional Capital at Polygon Labs, suggests, in CoinDesk, that the upcoming year might witness a significant increase in the tokenisation of real-world assets. Tokenisation involves transforming the rights to any asset, whether physical or digital, into a digital token on a blockchain. The market potential for this innovation is estimated in the trillions of dollars.
In the upcoming year, private equity funds and finance giants like JP Morgan and Hamilton Lane could drive tokenised fund development. From there, this could pave the way for a diverse array of next-generation tokenised assets spanning bonds, equities, real estate, art, and even fine wines and automobiles. Tokenisation’s unique feature of enabling fractional ownership promises increased accessibility to a broad spectrum of assets.
As the crypto landscape evolves, 2024 appears immensely packed with important events. From the anticipated Bitcoin halving to the rise of crypto payments and metaverse growth, the industry looks poised for expansion. Regulatory clarity and asset tokenisation further set the stage for a dynamic year marked by increased institutional involvement, and, hopefully, a new era of financial innovation and accessibility.
Disclaimer
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Capital at risk. This information is not investment advice. Crypto asset values can go up as well as down and you could lose all the money you invest. This is a high‑risk investment and you are not protected if it loses all or some of its value. Past performance is not indicative of future results.
