After experiencing a long crypto bear market, we must always be prepared to keep warm just like in winter. I can’t help but wonder: When will spring come?
However, my current feelings have changed subtly. This is not only the anticipation of summer, but also a feeling of relaxation, like taking off a heavy coat and putting on a light T-shirt. I think there are some clear signs that a bull market has quietly begun to emerge.
2023 is an important milestone for the crypto industry. The total crypto market capitalization has grown by nearly 93% from $794 billion in just one year to reach $1.53 trillion as of December 5. Now that we have entered 2024, it’s time to look ahead and look forward to upcoming crypto events. Here are the crypto events I think are most anticipated in 2024: 1. Government regulation: As the size of the encryption market continues to expand, government regulation of the encryption industry will become more stringent. We can expect governments to introduce more specific crypto laws and regulations in 2024 to protect the rights and interests of investors and maintain market stability. 2. Enterprises adopt encryption technology: More and more enterprises will adopt blockchain and encryption technology to improve efficiency and security. In 2024, we can expect more enterprises to integrate encryption technology to drive commerce
In 2024, I believe there will be six market catalysts that could become key points of interest and create new investment opportunities.
In October 2021, the U.S. Securities and Exchange Commission (SEC) approved the first Bitcoin (BTC)-based exchange-traded fund in the United States. Although a Bitcoin spot ETF has not yet been approved by U.S. financial regulators, my prediction for the future is that this is likely to change soon.
SEC officials met with Grayscale representatives on November 30 to discuss the possibility of converting the existing Grayscale Bitcoin Trust into an exchange-traded fund. The company won a key court battle with the SEC in August, forcing the latter to review its BTC ETF application. This meeting may be aimed at further promoting the transformation process.
Financial regulators BlackRock and Nasdaq held a formal meeting a day ago. According to the latest developments, the asset manager applied for a spot Bitcoin ETF with the SEC in June and a spot Ethereum ETF with the SEC in November. In addition, according to Bloomberg Intelligence ETF analyst James Seyffart, he expects the SEC to have a 90% probability of approving a Bitcoin ETF early next year. Analysts believe the approval decision will be made between January 8 and 10.
The current market is optimistic that the U.S. Bitcoin spot ETF will play an important role in institutions seeking to achieve diversified asset allocation through Bitcoin investment.
Major upgrades to the Ethereum network are usually one of the most important events of the year. This will be the case in 2024, when the Cancun upgrade is expected to take place in the first quarter of 2024, introducing the long-awaited original danksharding.
Proto-danksharding is a prototype of the iteration of danksharding technology developed by Ethereum. Due to Ethereum's limited scalability, transactions become slow and expensive during periods of heavy usage. Developers plan to leverage sharding, dividing the network into smaller parts called shards that can independently execute smart contracts and process transactions.
After the Cancun upgrade, Rollup-based layer 2 chains (such as Arbitrum One, Optimism and Base) can add cheaper data to blocks on the Ethereum mainnet via Blobs, which can be sent and appended to Ethereum The virtual machine in the block cannot be accessed. Through blobs and transactions carrying blobs, L2 can cost-effectively store and retrieve off-chain data on the Ethereum mainnet, making L2 transactions significantly cheaper after the Cancun upgrade.
The Cancun upgrade will also provide other benefits to Ethereum users, including optimized block space, reduced data storage costs, improved cross-chain communication, and enhanced security features through the reduction of SELF-DESTRUCT opcodes.
Since the beginning of 2022, the federal funds rate has continued to increase until the third quarter of 2023, as the Federal Reserve attempts to combat inflation in the United States. Between January 2022 and August 2023, the effective rate increased from 0.08% to the current target rates of 5.25% and 5.5%.
With U.S. inflation falling from a high of 9.1% in June 2022 to as low as 3.2% in October 2023, I believe the Fed’s rate hike cycle is coming to an end. The market expects the first interest rate cut to occur as early as May 2024. Driven by this, positive sentiment in the cryptocurrency industry is expected to increase, increasing the appeal of Bitcoin and other digital assets.
Why is this important to us? If we think of various financial markets as a series of different levels of pools, then at the top we find the U.S. currency and bond markets, which can be compared to the largest pools.
Currently, interest rates are high, resulting in a large amount of "water" in the pool. However, once interest rates are lowered, water starts flowing to smaller pools of funds, such as stocks and cryptocurrencies. When interest rates fall, the bond market becomes less attractive and individuals are more likely to invest their money in assets that offer higher risk and reward, such as cryptocurrencies.
Circle, the issuer of the USD Coin ( USDC ) stablecoin, is preparing to go public via an initial public offering (IPO) early next year, according to a November 2023 report. The move is expected to support the adoption of crypto stablecoins as it will make the company the first among the issuers to go public.
However, this is not Circle’s first attempt to go public. A year ago, the stablecoin issuer terminated its agreement with special purpose acquisition company (SPAC) Concord Acquisition Corp. The reason for the termination was reportedly due to the SEC's failure to approve the deal, which was first announced in July 2021.
Like Ethereum’s major upgrades, the Bitcoin halving is one of the most important developments in the crypto industry in 2024. However, unlike ETH hard forks, these events occur approximately every four years.
This event will reduce the amount of new Bitcoins miners receive from each newly mined block by 50%. By cutting the supply of new coins in half, Bitcoin will become more scarce and inflation will decrease.
As supply and demand dynamics strengthen, I expect the price of Bitcoin to surge after the event. In fact, all previous halvings have been accompanied by major cryptocurrency bull runs.
FTX founder Sam Bankman-Fried was convicted of multi-billion dollar fraud last November. Approval has been obtained to liquidate nearly $880 million in assets to repay creditors as part of the resolution process. These developments indicate that FTX is gradually entering the exchange restructuring stage. The resolution of the matter is expected to restore some investor trust and regulatory clarity, potentially attracting new retail funds to the industry. SEC Chairman Gary Gensler expressed his willingness to consider restarting FTX if new leadership replaces SBF and the exchange operates within legal limits. If approved by regulators, such a reboot could help increase trust in FTX, or at least mitigate the negative impact of the scandal.
With the approval of the BTC spot ETF in the United States, the Decun upgrade, and other important catalysts, we are likely to witness a Bitcoin super cycle in 2024. However, potential negatives could emerge next year.
For example, the now-defunct Mt.Gox exchange is expected to repay 137,000 BTC to creditors, and the U.S. government plans to liquidate Bitcoin stashes seized in the Silk Road case. These events can create selling pressure and could cause cryptocurrency prices to fall. Additionally, the global regulatory environment for cryptocurrencies remains uncertain, which opens the door to unforeseen events.
On the other hand, I believe that the BTC liquidation in the Mt. Gox case and the US government’s seizure of Silk Road may signal the emergence of a real bull market. This is likely to be accompanied by widespread adoption of cryptocurrencies and the introduction of innovations. Whatever the future holds, it’s important to “do your own research” (DYOR) and prepare for what could be the most bullish market in cryptocurrency history.
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