- 2024 will be the year of mainstream crypto adoption, with a Bitcoin and Ether spot ETF expected to be approved this month amid rising institutional investor interest from multi-trillion-dollar giants.
- Other major events will include Bitcoin’s fourth halving, the US election, the ruling on the SEC vs Ripple, and more, with some experts predicting BTC will hit $500,000 in 2024.
The crypto space had a successful year in 2023, with the sector’s overall market cap doubling from $800 billion in January last year to $1.75 trillion today. From behemoths like BlackRock and Fidelity filing crypto ETFs; to Ripple handing the SEC one defeat after another in court; to the emergence of new major players like Bonk; to mainstays like Solana gaining over 400%; it was an excellent year for crypto. But what lies ahead for the rapidly growing sector?
The Events That Will Define Crypto in 2024
The Bitcoin Spot ETF
Of all the expected developments in 2024, none can match up to the hype, impact and disruption that the approval of a BTC spot ETF will spark.
The US SEC is set to approve or deny a handful of applications from players like BlackRock, VanEck and Grayscale in a week. While Gary Gensler’s agency can deny or approve, most ETF experts and market stakeholders believe that the ETF will get the nod this time.
While the crypto community hasn’t reached a consensus on the expected extent of the impact, everyone agrees that the market will never be the same again. Some say that the market will dump initially due to the “buy the rumour, sell the news” phenomenon. Others say that the ETFs will only attract a few hundred million dollars, most recycled from the same investors in the market today.
Then there are those who believe that the ETF will open the floodgates for Bitcoin. They draw parallels between what an ETF did for gold, which 5x’ed its market cap from $2 trillion to $10 trillion, although this didn’t happen overnight.
A spot ETF will bring in players from the strictly regulated financial sectors, such as pension funds, which shy away from direct involvement in the purchase and storage of crypto. Players like BlackRock control over $8 trillion in assets, and if even 10% of this flowed into crypto, it could push BTC to unimaginable heights. And BlackRock isn’t the only multinational giant with a heavy war chest that will jump in.
The Bitcoin Halving
The Bitcoin halving, which takes place every four years (or 210,000 blocks), is always a landmark event, and this year’s will be no different. A halving, or halvening to some, slashes the block reward by half, reducing the rate at which new BTC tokens are produced.
This year’s halving is expected to be in April, with CoinMarketCap predicting it will be in 113 days.
The halving will reduce the block reward from 6.25 BTC to 3.125 BTC. Historically, Bitcoin tends to rise towards the halving but usually dips after the event. However, the halvings are almost always followed by a massive price surge within the next six months to a year. The best example is 2012, when it shot from $12 at halving to $1,000 within the next year. Other halvings in 2016 and 2020 followed the same pattern.
Regulators Catch Up with Crypto
If 2023 showed us anything, it’s that crypto isn’t beyond the grasp of the regulators. The two most prominent names in crypto—Sam Bankman-Fried and Changpeng Zhao (or SBF and CZ)—learned the hard way that even the most prominent exchanges must abide by financial laws. While CZ might get away with a resignation and a massive financial penalty, SBF is staring at over 100 years behind bars (although he probably will get less than five).
Other stalwarts, including BitMEX founder Arthur Hayes and Kraken founder Jesse Powell, have also found themselves on the wrong side of the law.
This year, regulators will crack down even harder on the crypto industry. While some say this overreach must stop, crypto can’t go mainstream until authorities are satisfied that the law is being followed. Additionally, we’ve seen how regulations can be critical in protecting investors. For instance, Japanese FTX users never lost a dime after the exchange collapsed since the country’s laws are up to standard.
On regulations, most jurisdictions now have laws for crypto, and they will enforce them earnestly in 2024. This includes Europe, whose MiCA framework is setting the global standard for regulators.
Ripple vs SEC
While the legal battle between the SEC and Ripple falls under the regulations category, its impact is significant enough to deserve its own category.
It all started around Christmas 2020 when ex-chairman Jay Clayton filed a lawsuit against Ripple for securities violations. The lawsuit has evolved, and while the SEC had the California company in a chokehold, Ripple has recently been dunking on the agency.
The brutal battle is set to come to an end this year. Attorney Jeremy Hogan predicts the case could conclude in July this year if no new twists arise.
The implications could be far-reaching. While a judge has ruled that secondary sales of XRP did not violate securities laws, primary sales might not get the same exemption. A decision against Ripple could devastate XRP, and in the long term, it would put hundreds of projects in the sights of the SEC, which would be emboldened by its victory. As such, a victory for Ripple is a victory for the entire space.
Bitcoin Price Predictions
No outlook can be complete without the price predictions for the top crypto. These predictions have ranged from $50,000 to over half a million dollars, with experts citing the ETF, institutional interest, and monetary easing by the US Fed and the European Central Bank as critical factors.
Youwei Yang, the chief economist at Bit Mining, a BTC mining firm, predicts $75,000.
“I anticipate the Bitcoin will be trading around $25K to $75K in 2024 and $45K to $130K in 2025. While high prices are possible, not all investors will profit due to market volatility and the human tendencies of fear and greed,” he opined.
CoinShares, known for its institutional products and research, has a similar prediction range. The company’s head of research, James Butetrfill, believes that the ETF will chip off some of the investment in traditional assets.
“Estimations suggest that a 20% investment increase from current assets under management (around US$3 billion) could potentially propel Bitcoin prices to US$80,000,” he commented.
The boldest prediction is by CoinFund, which projects BTC hitting $500,000.
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