Disclaimer: The opinions and perspectives expressed in this article are solely those of the author and do not reflect the views and opinions of the editorial team at crypto.news.
We’ve been navigating through this prolonged bear market, akin to enduring a harsh winter where one must always be equipped with a hat and gloves. The constant question lingering is, “When will the sun shine again?” However, my outlook has shifted. It’s not just about eagerly anticipating summer or the impending bull market. Instead, I find myself already in a T-shirt, shedding my jacket. I believe there are evident signs that the bull market has arrived.
2023 has been a thrilling year for the crypto industry. The combined market capitalization of cryptocurrencies has seen a remarkable surge of almost 93%, soaring from $794 billion on January 1, 2023, to $1.53 trillion as of December 5. As we approach the conclusion of 2023, it’s time to shift our gaze towards the upcoming year. In this piece, I have compiled the most significant crypto events to anticipate in 2024.
In 2024, I foresee six distinct market catalysts that could serve as pivotal points of interest for market participants. These catalysts could also unveil new investment opportunities.
Spot Bitcoin ETF Approval in the US
In October 2021, the US Securities and Exchange Commission (SEC) approved the nation’s first BTC-based exchange-traded fund. While a spot ETF for Bitcoin in the United States is yet to be approved, I anticipate this changing soon.
On November 30, SEC officials engaged in a meeting with representatives from Grayscale, a prominent crypto asset manager aiming to convert its existing Grayscale Bitcoin Trust into an exchange-traded fund. Having won a significant court battle against the agency in August, Grayscale legally compelled the SEC to review its BTC ETF application.
Prior to this meeting, there was also a formal discussion between the financial watchdog, BlackRock, and Nasdaq. BlackRock had filed for a spot Bitcoin ETF in June and a spot Ethereum ETF in November. According to Bloomberg Intelligence ETF analyst James Seyffart, there is a high probability of SEC Bitcoin ETF approval early next year, with analysts foreseeing the approval to take place between January 8 and 10.
The current market sentiment is optimistic, and the introduction of a Bitcoin spot ETF in the US will play a crucial role in attracting institutions looking to diversify their asset allocation through BTC investments.
Ethereum Dencun
Major upgrades to Ethereum’s network are always among the year’s most significant events. This will be the case in 2024 when the Dencun upgrade is expected to occur in the first quarter, introducing the long-awaited proto-danksharding.
Proto-danksharding represents the prototype of an iteration of danksharding technology developed by Ethereum. Due to Ethereum’s limited scalability, transactions slowed down and became costly during periods of high usage. Developers plan to implement sharding, dividing the network into smaller pieces known as shards that can independently execute smart contracts and process transactions.
Following the Dencun upgrade, rollup-based layer-2 chains like Arbitrum One, Optimism, and Base can augment cheaper data to blocks on the Ethereum mainnet via blobs. These blobs can be sent and attached to blocks, with the data inside being inaccessible to the Ethereum Virtual Machine. With blobs and blob-carrying transactions, layer-2 chains can store and retrieve off-chain data on the Ethereum mainnet efficiently, making layer-2 transactions significantly more cost-effective post the Dencun upgrade.
Dencun will also bring other benefits for Ethereum users, including optimized block space, reduced data storage costs, enhanced cross-chain communication, and improved security through the deprecation of the SELF-DESTRUCT function.
End of the US Interest Rate Hike
Since early 2022, the federal funds rate has been steadily increasing until Q3 2023, as the Federal Reserve aimed to combat inflation in the United States. From January 2022 to August 2023, the effective rate rose from 0.08% to the current target rate of 5.25% and 5.5%.
With US inflation declining from a peak of 9.1% in June 2022 to as low as 3.2% in October 2023, I believe the Federal Reserve’s interest rate hiking cycle is nearing its conclusion. The market anticipates the first rate cut to occur as early as May 2024. Under this scenario, positive sentiments within the cryptocurrency industry are expected to strengthen, enhancing the attractiveness of Bitcoin and other digital assets.
Why does this matter? If we envision the various financial markets as pools at different levels, the US monetary and bond market, comparable to the largest pool, is currently at a high level with a substantial amount of “water.” Once interest rates are reduced, it is as though the water starts to flow towards smaller pools, like equity and crypto. Lower interest rates diminish the appeal of the bond market, prompting individuals to seek higher-risk investments with potentially higher returns, such as cryptocurrencies.
Circle IPO
Circle, the issuer of the USD Coin (USDC) stablecoin, is gearing up to go public early next year through an initial public offering (IPO), as per a report from November 2023. This move is expected to make Circle the first publicly traded company among stablecoin issuers and is likely to boost the adoption of cryptographic stablecoins.
However, this isn’t Circle’s initial attempt at going public. A year ago, the stablecoin issuer terminated its agreement with special-purpose acquisition company (SPAC) Concord Acquisition Corp. The termination was reportedly due to the SEC’s failure to approve the deal, first announced in July 2021.
Bitcoin Halving
Similar to major Ethereum upgrades, Bitcoin halving stands out as one of the most significant developments in the crypto industry for 2024. Unlike ETH hard forks, Bitcoin halving events occur approximately every four years.
This event involves reducing the amount of new Bitcoin that miners receive for each newly mined block by 50%. By halving the new coin supply, Bitcoin becomes scarcer and less inflationary.
With improved supply-demand dynamics, I anticipate a surge in BTC’s price post-event. Historically, all previous halvings have been accompanied by substantial crypto bull runs.
FTX Case Nearing Resolution
In November, FTX’s founder, Sam Bankman-Fried, was found guilty of multi-billion dollar fraud. Approval to liquidate nearly $880 million of assets to repay creditors has been granted as part of the resolution process. These developments suggest that FTX is moving towards a stage where the exchange will undergo restructuring. The resolution of this matter is expected to restore some trust and regulatory clarity for investors, potentially attracting new retail funds to the industry. SEC Chair Gary Gensler has indicated a willingness to consider FTX’s reboot under the condition that new leadership replaces SBF and that the exchange operates within legal boundaries. If approved by the regulator, this reboot could help bolster trust in FTX or at the very least mitigate the negative repercussions of the scandal.
The Journey to the Next Crypto Bull Market
With the approval of a BTC spot ETF in the US, the Dencun upgrade, and other critical catalysts, we may very well witness a Bitcoin Super Cycle in 2024. However, there are potential negative factors that could arise next year.
For instance, the now-defunct Mt.Gox exchange is anticipated to repay 137,000 BTC to creditors, and the US government plans to liquidate the Bitcoin seized in the Silk Road case. These events could introduce selling pressure and potentially lead to declining cryptocurrency prices. Furthermore, the global regulatory environment for cryptocurrencies remains uncertain, opening doors to unforeseen events.
On the flip side, I believe that the liquidation of BTC from the Mt.Gox case and the US government’s Silk Road seizure could signal the dawn of an actual bull market. This could coincide with the widespread adoption of cryptocurrencies and the introduction of innovative solutions. Whatever the future holds, it is crucial to “Do Your Own Research” (DYOR) and be prepared for what could potentially be the most bullish market in crypto history.
For more insights:
Review of Crypto in 2023: The Key Events Shaping the Industry
By Gracy Chen
Gracy Chen is the managing director of the crypto derivatives exchange Bitget, where she oversees market expansion, business strategy, and corporate development. Prior to joining Bitget, she held executive roles at Fortune 500 unicorn company Accumulus and venture-backed VR startups XRSPACE and ReigVR. She was also an early investor in BitKeep, Asia’s leading decentralized wallet. Recognized as a Global Shaper by the World Economic Forum in 2015, she graduated from the National University of Singapore and is currently pursuing an MBA at the Massachusetts Institute of Technology. Follow Us on Google News.