By Vikram Subburaj, CEO, Giottus Crypto Platform
The crypto sphere, marked by its flux and dynamism, has captured the attention of investors and enthusiasts alike. The journey has been filled with mixed optimism over the years but 2024 seems like a new start with the promise of transformation and a host of pivotal developments that will guide the ecosystem for years to come.
From Bitcoin’s much-awaited halving to the proliferation of use case-driven tokens, each thread weaves into the grand tapestry of the crypto narrative.
Today, we explore some of these pivotal trends and what they mean for 2024 and beyond.
1. A new market cycle begins after Bitcoin’s halving
The crypto community is set to witness another great milestone in Bitcoin’s lifecycle this April. The upcoming fourth halving is poised to slash Bitcoin’s mining block reward from 6.25 BTC to 3.125 BTC, effectively curbing the influx of new coins into circulation. This typically marks the birth of a new cycle for the crypto ecosystem.
Historically, these halvings have acted as catalysts for sustained growth in Bitcoin and other digital assets’ value, injecting fresh momentum and fervour into the Web3 landscape. This quadrennial occurrence not only shapes Bitcoin’s supply dynamics but also serves as a barometer for market sentiment and investor enthusiasm.
2. Institutions adopt Bitcoin post-spot ETF approvals
In 2023, the US witnessed significant strides toward introducing regulated spot bitcoin ETFs. Currently, 13 spot BTC ETF applications await SEC review with approvals expected starting this month.
The mounting optimism surrounding the imminent approvals for Bitcoin spot ETFs has garnered heightened attention from traditional institutional investors eyeing to enter the crypto investment market. The green light for a spot Bitcoin ETF would signify a pivotal milestone in legitimising Bitcoin as a mainstream institutional-grade investment, cementing its credibility and permanence in the financial landscape.
Soon, crypto assets may become a key diversifying tool for all investors globally with unbundled access. This approval will serve as an endorsement, underscoring crypto’s authenticity, resilience, and enduring presence in the global investment arena.
3. Businesses to flourish in an evolving regulatory landscape
The regulatory environment surrounding crypto assets has become notably diverse on a global scale. Various nations are shaping their crypto regulations based on their distinct economic, social, and political landscapes.
India, as part of its G20 presidency, shaped some of this narrative on a global forum last year. Within its shores, the active involvement of FIU and registration of 31 domestic businesses (crypto platforms) as reporting entities under it, was a notable achievement in 2023.
The evolving regulatory clarity holds the potential to enhance adoption rates both in India and globally. With governments worldwide offering clearer directives on the regulatory and tax treatment of crypto assets, investors and institutions become increasingly confident in engaging with digital assets.
Businesses will likely get adequate funding to build products in this ecosystem while they also serve the economy well in terms of job creation.
4. Adoption of use case-based projects
If WorldCoin was the darling of 2023, AI-based tokens may become the crown jewel of 2024.
Bringing together AI and crypto unveils a realm of potential where their strengths complement each other. This integration presents an opportunity for the emergence of AI-based tokens to reshape various industries. Leveraging machine learning, predictive analytics, and other AI-driven technologies, some innovative projects are set to revolutionise sectors like healthcare, finance, logistics, and more.
In terms of blockchain infrastructure, many projects are already working on increasing the scalability of current blockchains as well as data migration between them. Blockchain technology has often felt cumbersome to navigate for end users – projects that make it easy and seamless to do transactions at scale will thrive and in turn present new and exciting opportunities for investors.
5. CBDCs replace stablecoins as the go-to route for value conversion
With Governments launching their version of digital currencies (Central Bank Digital Currencies/CBDCs), the role of stablecoins may be reduced over time. Stablecoins, though useful, have been scrutinised by central banks globally especially given the lack the transparency around the assets they are backed by. CBDCs, including India’s eRupee, can become the way for investors to enter and exit the crypto landscape with traditional currencies.
As 2024 unfolds, these trends could collectively shape a dynamic landscape, offering promising prospects for the future of crypto assets!