2 min readExecutive Summary
Transformative Year for Digital Assets: 2024 is set to be a landmark year for digital assets, with the recent launch of spot-based Bitcoin ETFs in the US, potentially raising Bitcoin prices to approximately US$60,000.
Monetary Policy and Bitcoin Valuation: Bitcoin's value continues to be significantly influenced by monetary policy. With the US Federal Reserve likely to cut interest rates in the first half of 2024, Bitcoin, alongside gold, could see increased appeal.
US Dollar's Influence: The diminishing appeal of the US Dollar, amid geopolitical shifts and concerns over US debt sustainability, could lead to a decreased appetite for the dollar and a corresponding improving interest in Bitcoin.
Investor Diversification Needs: The high correlation between bonds and equities is driving investors towards Bitcoin for diversification, further influencing its adoption and valuation.
Ethereum's Sentiment: Ethereum saw relatively muted institutional inflow in 2023, attributed to stiff competition from low transaction fee alt-L1 protocols like Solana and scepticism over the scaling roadmap set to take shape in H1 2024 (Dencun upgrade). A successful implementation with improving L2 user interaction mechanics, alongside the possibility of a Spot Ether ETF in the second half of the year are likely to rekindle inflows.
Developer Activity: Developer activity in most crypto ecosystems continues to fall from their peaks in January of 2022. With exciting new developments and upgrades in major protocols such as Bitcoin, Ethereum and Solana, a resurgence in activity is expected in 2024.
Regulatory Developments: In 2024 the EU’s Markets in Crypto Assets Regulation will commence and we expect more countries to provide guidance for regulated stablecoins.
Bitcoin Mining and Halving Impact: The Bitcoin mining industry is preparing for the 2024 halving event, with miners in better shape compared to the previous halving. This event, coupled with regulatory advancements and monetary policy changes, could significantly influence Bitcoin's price.
Blockchain Equities and Macroeconomic Trends: The shift in the Federal Reserve’s monetary policy, the looming maturity walls, and the impact of interest rate cuts on blockchain equities in 2024.
Solana's Solidified Resurgence: Solana's advancements suggest its potential to significantly impact the DeFi market and data availability sector in 2024.
Bitcoin Fee Market Development: The rising transaction fee market on Bitcoin paves the way for plugin technologies to be put to the test, likely capturing the demand of users who look to materially decrease their base layer footprint.