My Crypto Predictions for 2024

Last week I told you about how I’ve been reading about crypto trends for 2024.

With over 12 Bitcoin ETF applications due to expire in the early days of January, the Securities and Exchange Commission (SEC) is facing a critical deadline and can no longer delay deciding whether to approve a Bitcoin SPOT ETF. While there's a minimal chance of rejection, it seems unlikely; if that were the case, they would have likely rejected it by now. Adding weight to this scenario is the influence of BlackRock, the world's largest investment fund, which boasts an almost perfect track record with the SEC, having 575 of its 576 ETF applications approved. Rumors are circulating that all the applications might be approved at once to ensure fair play among the various funds. This leads to an intriguing question: Is this a situation of 'buy the rumor, sell the news,' or should one 'buy the rumor and also buy the news'?

In 2024, several potential catalysts could significantly influence the price of Bitcoin. A major factor is the anticipated approval of a Bitcoin ETF, which is expected to boost demand. Additionally, the Bitcoin halving event around April 2024 will reduce the BTC supply issuance from 6.25 BTC per block to 3.125 BTC, impacting the supply-demand dynamics.

Another key aspect to consider is the pause in interest rate hikes. The market often looks ahead, and a halt in rising rates might suggest that the Federal Reserve could start to lower them in the near future, creating a sense of optimism among investors. However, there's a flip side: a pause and potential decrease in rates might also indicate inflation control at the cost of economic slowdown, which isn’t necessarily a positive sign for the broader economy.

Regulatory clarity, expected in 2024, could also play a crucial role by providing stability and confidence in the cryptocurrency market. Moreover, Bitcoin's further legitimisation, as more countries consider adopting it within their central bank reserves, could enhance its value and acceptance.

However, it's important to be mindful of potential volatility in 2024, especially due to the closely contested U.S. elections, which could have significant implications for the market. These factors combined present a complex and dynamic landscape for Bitcoin's value in the coming year.

Unfortunately, the only way for DeFi (Decentralised Finance) to reach the mainstream will likely be through its CeDeFi (Centralised Decentralised Finance) variant. This means regulated frontends with Know Your Customer (KYC) procedures utilising DeFi in their backend. Crypto natives will still be able to operate directly in DeFi, managing our keys and such, but we will remain a niche, which personally, I find acceptable.

New Fintech applications from startups, institutions, and banks will start to leverage DeFi solutions in their backend while maintaining restricted user access. These entities will try to comply with all regulatory norms and harness some benefits of DeFi. This approach suggests a merging of traditional financial structures with the innovative aspects of decentralized finance, aiming to blend the best of both worlds.

In 2024, Ethereum is set to have its own ETF, following Bitcoin's lead. Ethereum is the second most significant cryptocurrency and, in my opinion, has stronger fundamentals. Once Bitcoin paves the way with ETFs, Ethereum will likely follow suit. It's uncertain if more ETFs for other cryptocurrencies will immediately follow.

Ethereum will continue to trail behind Bitcoin. I don't foresee a 'flippening' happening, nor do I believe it's something to particularly celebrate. Ethereum's real triumph will lie in its accumulation of on-chain activity through Layer 2 (L2) and Layer 3 (L3) solutions.

The deployment of EIP-4844 proto-danksharding in 2024 will make transactions on L2 even faster and more efficient. For more detailed information, you can refer to the Ethereum Roadmap. This development represents a significant step forward in Ethereum's scalability and efficiency, potentially boosting its utility and adoption.

Within the multichain narrative, we're seeing the emergence of the AppChains concept. This includes Layer 2s (L2s), Layer 3s (L3s), ZK-Rollups, OP Stack, Coinbase Base layer, Kraken L2s, and more. The cost of launching your own chain that settles transactions on a deeper layer (L2 or L1) will be low, with incentives to do so.

2024 might witness the first financial institutions using their blockchains to deploy tokenized digital assets. This will lead to the creation of new marketplaces for verified players. We can expect to see more traditional finance (TradFi) experimenting with asset tokenization. The Real-World Assets (RWA) trend could be reignited by these TradFi players who “guarantee” the security of real-life assets.

Adding to this narrative is the concept of "modular architecture." The monolithic blockchain model, like Bitcoin's, becomes a legacy system, and new chains and blockchain solutions will be implemented by separating the layers of consensus, data, and verification. We'll see a greater variety of providers for each layer.

The big winner in this narrative will be whoever manages to establish themselves as a standard for communication between the countless blockchains and layers that will be created in the future. 2024 could be the year we start to see the early movers in this space, potentially involving Cross-Chain Interoperability Protocols (CCIP).

Currently, only major tech companies have the resources to train and operate advanced AI models like ChatGPT, due to the high costs of computing and data. However, blockchain technology opens the possibility of creating global, permissionless markets where everyone can contribute and be compensated, whether by providing computing power or new datasets. This will democratize AI, making it more accessible and affordable.

In a world where AI can generate content massively, including deep fakes, crypto technologies can help us verify the origin of online content. It's crucial that we seek ways to decentralise generative AI and manage it democratically to prevent a single entity from making decisions for everyone.

In 2024, we will see more projects and ideas surrounding these concepts. It will be a year of experimentation with AI and Crypto Web3, marking a significant step toward integrating these technologies for broader, more equitable use.

The widespread adoption of crypto will come from solutions that are more user-friendly. The mainstream audience is not particularly interested in learning how to safeguard their seed phrase or manage their security. While continuous education is essential, the reality is that ease of adoption will be a key driver.

New dApps utilizing Account Abstraction (AA) will make crypto products and services easier to use, feeling more familiar to users accustomed to web2 interfaces (like social logins and passwords). I foresee a strong focus on the social aspect of wallets, ranging from having wallet recovery contacts to developing mini social networks or communities within wallets. There are many aspects of community integration within wallets that remain unexplored and hold great potential for enhancing user engagement and security in the crypto space.

The blockchain gaming industry is on the cusp of a significant breakthrough, with the expectation that a game will surpass one million daily users in 2024. Immutable X (IMX) is a strong contender to enter the top 25 by market capitalization, thanks to the launch of high-budget titles like Illuvium and Guild of Guardians.

Immutable focuses on AAA games that offer genuine fun and token systems designed to prevent automated farming. With substantial investment (over $100 million) and solutions to common technical issues, such as wallet management through its "Passport" system, and partnerships with major distributors, Immutable is well-positioned to bring blockchain gaming to the mainstream market. This could mark a pivotal moment in making blockchain-based games a mainstream entertainment option.

DePINs (Decentralised Physical Infrastructure Networks) are blockchain protocols that build, maintain, and operate physical infrastructure in an open and decentralised manner. They represent the next evolution in the Internet of Things (IoT) trend. This physical infrastructure can include hardware such as Wi-Fi routers, GPU chips for computing, or data centers for file storage.

Other DePINs involve computational resource providers like Render, Theta Network, and Akash, which incentivize users to contribute computing power using Graphics Processing Units (GPUs). Others, like Helium, offer a decentralized wireless network, encouraging users to provide wireless network coverage through access points or hotspots.

The beauty of DePIN networks lies in their ability to create an open, permissionless market for infrastructure across various industries, including media, gaming, artificial intelligence, and information services. Without a doubt, this is a trend that will continue to grow in the future, offering new opportunities for decentralised collaboration and innovation across multiple sectors.

Homomorphic encryption is a cryptographic technique that allows computations to be performed on encrypted data without the need to decrypt it. This means that the original data can remain completely encrypted while being processed, manipulated, and subjected to various algorithms and analyses.

This capability allows you to maintain the privacy of data while sharing it with third parties for processing. Since current encryption methods cannot perform calculations on encrypted data, homomorphic encryption is poised to unlock many exciting applications. It offers the potential for secure data analysis and processing, which could have significant implications across a variety of industries, including healthcare, finance, and cloud computing.

🙌🏻 And Bob's your uncle, 10 predictions based on what I’ve been studying and thinking for this 2024. 🚀

I hope you have great festivities and will see you next year! 🎄

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