The final notes of DailyCoin’s feature “12 Days of Cryptomas” have reached the grand finale. Like the 12 drummers drumming, we are looking at what is drumming up excitement in the upcoming year for crypto.
2024 is expected to play host to several major turning points, with a potential bull run fueled by spot ETF applications and the much-anticipated Bitcoin halving event just part of the show. The coming year also brings pivotal regulatory updates from the US and Europe, aiming to bring clarity and stability to the market.
Moreover, high-profile cases like FTX and Celsius are inching toward resolution. Meanwhile, the steady rise of decentralized exchanges and innovative technologies signals a shift towards a more nuanced and mature digital financial ecosystem.
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Here are the top 10 key developments shaping crypto in 2024.
Table of Contents
Crypto Bull Rally on The Horizon?
The possibility of a Bitcoin bull rally in 2024 has garnered significant attention. The likely spot ETF approval in the US and the impending Bitcoin halving contribute to bullish momentum.
Bitcoin Spot ETF Approval Set for 2024?
In January 2024, the cryptocurrency market awaits a crucial decision from the U.S. Securities and Exchange Commission (SEC) on various spot Bitcoin ETF (Exchange-Traded Fund) applications.
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Bitcoin ETFs mirror traditional ETFs, allowing investment in Bitcoin without the complexities of direct ownership, which appeals to institutional investors. The anticipated approval of Bitcoin ETFs could broaden Bitcoin’s investor base, potentially leading to increased adoption and price stability.
The potential influx of institutional investment into these EFTs, estimated at over $2.4 billion by investment management firm VanEck, will push the price of Bitcoin up.
For that reason, several analysts and crypto executives predicted that Bitcoin could reach or even surpass $100,000, following an approval of a spot ETF in the United States. Both Matrixport and Standard Chartered see Bitcoin above that mark sometime in 2024, fuelled mostly by ETF Approvals. Moreover, Bitwise sees Bitcoin at $80,000 after the ETF approval.
Still, JP Morgan has less optimistic predictions, suggesting that markets are already pricing in an ETF approval.
Stable Interest Rates in 2024?
Adding to the spot ETF hype is next year’s likely more favorable macroeconomic environment for crypto. Expectations that central banks globally will forgo further rate hikes in 2024 could boost the prices of speculative assets like crypto.
Most major central banks are expected to cut policy rates modestly, driven by declining inflation rates. This shift aims to bring policy rates from restrictive to neutral levels, aligning with economic softening.
According to BofA Global Research, rate cuts are anticipated to begin midway through the year, by both the Federal Reserve and European Central Bank.
Rate cuts are significant as lower interest rates generally reduce the appeal of traditional safe-haven assets. This, in turn, makes high-risk, high-reward assets like crypto more attractive to investors. scenario, combined with the reduced cost of borrowing, could encourage more investment in the crypto sector, driving up crypto prices.
Bitcoin Halving Event Set For 2024: Major Catalyst?
In addition to ETF approvals and a positive macroeconomic environment, the upcoming Bitcoin halving might act as a catalyst for a bull market.
This halving, expected in April or May, will decrease the reward given to miners from 6.25 to 3.125 Bitcoins per block. Historically, halvings have been significant for Bitcoin’s network, impacting supply and demand dynamics.
During a halving, the rate at which new coins are created is reduced, influencing Bitcoin’s supply. For that reason, past halvings have led to significant price increases. For instance, after the first halving in 2012, Bitcoin’s price surged from $12 to $964 within a year.
Similarly, the 2016 halving saw nearly quadrupling Bitcoin’s price the following year. The 2020 halving also resulted in a significant price increase.
While it’s difficult to predict the impact of the 2024 halving, historical trends suggest that it could lead to another round of price increases for Bitcoin. Coupled with the spot ETF hype and macroeconomic factors, these signs point to a potential bull run.
Is 2024 Altcoin Season Again?
The expected approval of Bitcoin ETFs and the anticipation of global central banks moving away from rate hikes could create a favorable environment for cryptocurrencies in general.
In such a climate, after initial strong performances by Bitcoin and Ethereum, partly driven by the Bitcoin halving event and ETF approvals, there might be a shift of investor interest towards altcoins. This could lead to an altcoin season, characterized by a significant performance surge in these alternative cryptocurrencies.
For instance, Crypto Feras, a famous crypto trader, predicts that the next major altcoin season will likely occur between December 2023 and May 2024. As investors seek to diversify their portfolios and capitalize on emerging opportunities within the broader crypto market, altcoins are set to benefit.
FTX, Celsius Sagas Draw to Close With New Regulations Coming
While bullish factors will likely predominate in 2024, the year will also bring the final end to the destructive FTX and Celsius bankruptcies. Wreaking havoc in crypto markets in 2022 and early 2023, these high-profile bankruptcies have contributed to a major global regulatory push for crypto. Thanks to these events, 2024 will likely be when governments worldwide seriously tackle crypto regulation.
US Crypto Bill Coming?
In 2023, a US congressional committee advanced a bipartisan bill to establish a regulatory framework for cryptocurrencies. This move marks a significant step towards federal oversight in the digital asset industry.
The bill intends to clarify when a cryptocurrency is a security or a commodity, addressing a critical ambiguity in current regulations. It proposes to extend the Commodity Futures Trading Commission’s (CFTC) oversight over cryptocurrencies, while also defining the Securities and Exchange Commission’s (SEC) jurisdiction.
Presently, the SEC and CFTC are engaged in a “turf war,” each asserting regulatory authority over different aspects of the crypto market. This battle underscores the existing confusion and lack of clear regulatory boundaries.
It is still unclear whether the bill can pass the Senate. While garnering support from industry stakeholders and some politicians, it still faces opposition from others who fear it may reduce consumer protections.
Europe Redefines Crypto Regulation With MiCA
While the US grapples with establishing a unified regulatory framework for cryptocurrencies, Europe has already tackled this issue. The Markets in Crypto-Assets (MiCA) regulation, set to take effect in 2024, will create a comprehensive framework for crypto.
This comprehensive law, the first of its kind by a major jurisdiction, mandates licensing for crypto wallet providers and exchanges within the EU and requires stablecoin issuers to maintain sufficient reserves.
Alongside MiCA, the Transfer of Funds regulation will enhance anti-money laundering measures by requiring crypto operators to identify their customers.
FTX Bankruptcy Saga Draws to a Close
The bankruptcy of FTX, one of the most notorious collapses in crypto history, has been a driving factor behind the global push for clearer and more comprehensive regulations in the crypto market.
In 2024, the FTX bankruptcy case is set to close, with users expected to get compensation for the assets they held in the exchange. That is if anything remains after creditors get their cut.
Will FTX Users Get Compensation?
In October 2023, FTX reached a settlement over a potential payout of approximately $8.9 billion to FTX.com customers and $166 million to FTX.US customers.
The deal would see customers get as much as 90% of the remaining assets after bankruptcy. However, this represents a measure of the money remaining after the bankruptcy process, not the initial amount deposited into FTX.
This means that users will likely get 85% of the dollar value they held in FTX at its bankruptcy. Moreover, users who withdrew more than $250,000 from the exchange nine days before its bankruptcy will have to pay a 15% fee, to put them in the same position as other users.
These figures are contingent on the approval of the current restitution plan. Moreover, the resolution of the FTX bankruptcy faces another major obstacle: a $24 billion tax claim from the IRS. This claim presents a substantial risk in the restitution process for FTX’s customers.
Will FTT Token Holders Get Anything?
FTT token holders are unlikely to receive compensation from the FTX bankruptcy settlement. The restructuring plan states that holders of FTT claims will not receive any distributions and that all FTT claims shall be canceled, released, and extinguished.
Still, FTT token holders might benefit from a relaunch of the FTX exchange. However, any benefit to FTT token holders is contingent on the new FTX making FTT its native token and reinvesting profits into token burns.
In fact, the token surged on news of a potential relaunch. For that reason, FTT currently shows a year-over-year increase of 210.34%, trading at $4.24. Despite falling -94.46% from its all-time high of $85.02 on Sep 09, 2021, it has recovered impressively from its all-time low of $0.7763 six months ago, marking a +507.01% increase.
Is FTX Set for Relaunch in 2024?
FTX is considering a relaunch in 2024, according to a proposed plan by its bankruptcy administrators. This plan entails restarting FTX.com primarily for offshore customers, not including those in the U.S. The proposal includes organizing creditors into different classes, with a specific class having the option to collaborate with third-party investors to establish an “offshore exchange company” or a rebooted platform.
However, it is essential to note that this relaunch plan still requires agreement among various stakeholders and approval from the bankruptcy court. Still, news over the relaunch has been favorable, with even SEC’s Chair Gensler nodding that this would be possible, within bounds.
Celsius Debacle Reaches End in 2024
Celsius Network, a crypto lending platform, was another disaster that hit crypto in 2022. The company filed for bankruptcy in July 2022, after reports surfaced of the company misusing customer funds.
Now, Celsius has been cleared to exit bankruptcy with a restructuring plan approved by the U.S. Bankruptcy Court. This plan involves returning cryptocurrency to customers and creating a new company managed by Fahrenheit LLC.
The reorganized business will focus on mining Bitcoin and earning staking fees. Celsius plans to emerge from Chapter 11 in early 2024.
Will Celsius Users Get their Money Back in 2024?
As part of the bankruptcy recovery, Celsius customers will receive equity shares in the new company and a partial repayment of the cryptocurrency assets they deposited on the platform. About $2 billion in cryptocurrency is expected to go to account holders.
At the time of filing for bankruptcy, Celsius had around 600,000 customers with about $4.4 billion in interest-bearing accounts. This means that users can expect to get less than 50% of what they deposited with Celsius. However, they will also get equity in the new company.
The Future is Decentralized
The catastrophic debacles of FTX, Celsius, and others have shaken the trust in centralized players in the crypto space. For that reason, decentralized exchanges (DEX) and decentralized finance (DeFi) gained a major boost in 2023. The trend towards greater decentralization, in line with the original values of crypto, is expected to continue in 2024.
DEX Growth in 2024
In the eroding trust for centralized players, decentralized exchanges (DEXs) are emerging as a potential solution. DEXs offer a more secure and transparent alternative to their centralized exchanges and are developing rapidly.
In 2024, decentralized exchanges (DEXs) are poised for significant growth, spurred by advancements in various areas. Key improvements include enhanced liquidity protocols that address the long-standing issue of limited liquidity, a traditionally significant advantage of centralized exchanges (CEXs).
User experience is another major focus, with DEXs simplifying interfaces to attract a broader, less technically savvy audience. Additionally, DEXs are implementing Layer-2 solutions for better scalability, increasing transaction speeds while lowering costs.
Lastly, the introduction of sophisticated trading features, such as derivatives trading, is positioning DEXs to offer services once exclusive to CEXs.
Exciting Upcoming Technologies in 2024
The decentralized technology and cryptocurrency sectors are undergoing transformative changes in 2024. The DeFi sector is leading this charge, but other industry segments are also set for major changes.
The DeFi sector is set to undergo significant advancements, expanding its offerings to include more complex financial services. This may include lending, borrowing, and insurance, thus enhancing the scope and accessibility of decentralized financial solutions.
NFTs have already made a substantial impact in domains like art, music, and gaming, and by 2024, their integration is expected to deepen further. The potential applications of NFTs are vast, ranging from digital asset ownership to authentication of physical items. This trend is set to redefine ownership and authenticity in the digital age and offer more opportunities to creators.
The push towards interoperability within blockchain networks is expected to gain momentum. In 2024, we’re likely to see a significant increase in blockchain projects that prioritize cross-chain compatibility. This interoperability will enable greater collaboration among various blockchain ecosystems.
With increasing global awareness of environmental issues, sustainability is becoming a critical focus in blockchain development. By 2024, many blockchain projects are expected to adopt more energy-efficient consensus mechanisms, reflecting a concerted effort to reduce the environmental impact of blockchain technology.
Conclusion: 2024 Looks Like an Exciting Year for Crypto
In 2024, the crypto sector will likely see several major developments, accompanied by a potential Bitcoin bull run. The resolution of key cases like FTX and Celsius, along with regulatory clarity, will help build trust in crypto. Moreover, the growth of DeFi and decentralized technologies will put crypto on a more decentralized path. Therefore, 2024 could be a turning point for crypto, opening avenues for mainstream adoption.
