The crypto market has witnessed tremendous changes over the past decade, but in the last quarter of 2022 and 2023 it witnessed a series of collapses and bankruptcies that shook the entire cryptocurrency market, shocking investors.
The collapse of FTX – the third largest cryptocurrency exchange in the world, which was previously worth $32 billion – and the announcement of its bankruptcy shattered investor confidence.
Core Scientific, one of the largest publicly traded cryptocurrency mining companies in the United States, which primarily mines Bitcoin, also announced its bankruptcy on December 20, 2022, noting that this occurred due to falling cryptocurrency prices and rising energy costs.
Overall, the cryptocurrency market lost more than $2 trillion in 2022, and other digital currencies such as Bitcoin fell below their highest levels in 2021.
But the cryptocurrency market is very rich in different currencies and some of them can be a much better option than Bitcoin, as some of them are already achieving great results and showing great opportunities for a very significant increase in their value in 2024.
But does this mean that the cryptocurrency market may recover in 2024? Will regulators play a more important role? What will companies do to confront the current series of collapses?
Here are the 6 most important trends that will shape the crypto market in 2024:
1. Follow a policy of greater transparency
Transparency is the most important requirement in the cryptocurrency market right now, and 2023 has shown that this is a must, so companies and trading platforms will make their practices more open and transparent so that the public can regain trust in the industry.
Some prominent companies, such as: Binance, Coinbase, and others have already begun to deploy new mechanisms for proving their reserves.
After the bankruptcy of FTX, at the end of 2022, Binance launched a mechanism called (Proof of Reserve) – also known as (PoR).
Which aims to prove that the balances of depositors and the public are compatible with their respective deposit operations, and independent third parties carry out audits according to this mechanism in order to secure reserve data against attempts to falsify it.
Thus, it is expected that 2024 will become the year of transparency for crypto companies.
Any platform would have to prove what it does by showing its reserve of funds, some prominent companies could set rules to regulate the matter, and an independent group of people could emerge who would impose some rules on companies to show transparency to users.
2. Increase organizational campaigns
The huge losses witnessed by the cryptocurrency market during the year 2022 and 2023 confirmed that the market needs global regulatory action to stop the risks of lacking key protections.
A new analysis conducted by the Bank for International Settlements in November showed that the value of Bitcoin has fallen by about two-thirds from its peak level in late 2021, and about three-quarters of investors have lost the money they invested in it.
The collapse of the FTX exchange and criminal fraud charges against its founder (Sam Bankman-Fried) led to widespread embarrassment in the US Congress and among regulatory bodies.
Bankman and other senior managers at FTX have made generous donations to Democratic and Republican campaigns, and have played a key role in trying to create a new regulatory framework that reflects some of their priorities in the crypto market.
Although the crypto sector crises have not destabilized traditional financial markets, these bodies have been criticized for failing to take action to address the worst abuses in the sector.
Regulatory campaigns for the digital currency market have become everywhere now. There are also European developments in this field, and there is no doubt that these regulatory campaigns will be beneficial to existing companies, and will regulate the presence of emerging companies in this market as well.
3. Companies are adopting NFTs more
The global non-fungible tokens (NFTs) market was valued at about $15.5 billion in 2021, and is expected to reach $122.43 billion by 2028, so these tokens are expected to witness significant demand in 2024.
NFT is a type of crypto asset, which allows the user to own a digital asset, such as: a painting, a video, a shoe, a t-shirt and other assets that you can buy, but what you buy you will never wear.
NFTs are a crypto asset, not a cryptocurrency, and are based on Ether and use the cryptocurrency Ethereum for purchases.
During 2024, we are expected to see more real-world tangible assets converted into crypto tokens, making the buying, selling and trading of these assets more efficient while reducing the possibility of fraud.
Examples include: Adidas offering an NFT product line, Reddit offering Avatars in exchange for NFTs that have generated nearly $5 million in sales, and Starbucks’ NFT-based loyalty program.
4. Bitcoin’s next rise
Many industry experts have talked about historical Bitcoin cycles that occur approximately every 4 years, where Bitcoin typically reaches an all-time high, and then declines dramatically.
Anthony Scaramucci, founder of SkyBridge Capital, called 2023 the year of recovery for Bitcoin and expected it to trade between the $50,000 to $100,000 range within two to three years.
The start of Bitcoin’s uptrend may be a year away, as the after-effects of the FTX collapse may continue to be felt for up to another 6-9 months.
Bill Tai: Venture capitalist and cryptocurrency veteran.
5. Growth of WEB 3.0 platforms
The value of the global Web 3 market reached about $3.2 billion in 2021, and this growth is expected to continue to reach $81 billion in 2030, thanks to increased reliance on new technologies based on Blockchain.
Since Blockchain helps the growth of tokenization of securities, in 2024 we may see some people using their WEB 3.0 wallets to own physical things.
The question remains: how will crypto assets be regulated? Experts believe that the next wave in the crypto world may be through owning physical goods by owning the tokens of these goods, and it could also have a space for NFTs but slightly modified.
For most people NFTs are just an art now, but when they are able to own land, a house or a car through them it will give them an understanding of the real use of these blockchain technologies.
Web3 and the decentralization of the crypto market will allow users to trade much faster without intermediaries, so market conditions are expected to shift crypto projects away from speculation towards more utility, and more platforms based on Web3 will emerge.
6. Most Meme Cryptocurrencies Have Disappeared
Meme currencies are digital currencies, such as Bitcoin and Ethereum, but they are cryptocurrencies that can be linked to a pop culture reference or internet joke, and like the memes they are based on, are designed to spread virally and be shared, usually represented by funny images.
During a year in 2021, the Shiba Inu currency – one of the digital meme currencies – rose by 44,540,000%, while the Squid currency, a currency named after the famous Korean series (Squid Game), rose more than 75,000% in less than a week. She disappeared after a short time. So it is expected that most meme coins will disappear during 2024.
