Opinion: Skeptics of Crypto Face an Uphill Battle in 2024

Disclaimer: The opinions expressed in this article are solely those of the author and do not represent the views and opinions of crypto.news’ editorial team.

Over the past two years, critics of cryptocurrency have been given ample ammunition to support their arguments. The collapse of Terra in May 2022 was followed by the downfall of Sam Bankman-Fried and his empire six months later, making his trial one of the most highly anticipated events of 2023. Additionally, the surprising lawsuits against Coinbase and Binance by the SEC in June, as well as Binance’s $4.3 billion settlement with the Department of Justice in November, added to the skeptics’ vindication.

Despite these setbacks, the outlook for the crypto sector in the coming year remains overwhelmingly bullish. In July, Standard Chartered predicted that Bitcoin (BTC) would reach a price of $120,000 by the end of 2024, with a target of $50,000 by the end of 2023. By November, even before Bitcoin’s impressive rally to a 20-month high, the firm reaffirmed its forecast of $100,000, stating that everything was going according to plan.

Analysts at Van Eck share a similar optimism, predicting that Bitcoin will surpass its all-time highs in the fourth quarter of 2024. They even go so far as to suggest that if Bitcoin exceeds $100,000, Satoshi Nakamoto could be named Time’s Person of the Year, succeeding Taylor Swift. Grayscale also anticipates that the upcoming presidential election will influence crypto prices, citing growing mistrust in institutions, income inequality, and increased financial awareness among younger demographics as factors that make conditions ripe for Bitcoin adoption.

Making accurate price predictions is always challenging, but it is reasonable to assume that 2024 will be a positive year for the crypto sector, as it tends to follow the ebbs and flows of Bitcoin prices. Two major factors that will impact prices this year are the anticipated halving event in April and the long-awaited approval of a Bitcoin exchange-traded fund (ETF).

The halving event reduces the supply of new BTC entering circulation and historically triggers a bullish phase in Bitcoin’s four-year price cycles. On the other hand, the approval of a Bitcoin ETF, which the crypto sector has been seeking for over a decade, is expected to drive institutional demand. Such approval would be seen as a significant boost to the industry’s future prospects in the US.

Furthermore, the approval of a Bitcoin ETF would reinforce the current trajectory of Binance, which is losing market share, and pave the way for consolidation among more regulated competitors. This would create opportunities for regulated competitors to seize the market, especially in a growth market. The increasing regulation of digital assets and the decreasing influence of non-compliant operators like Binance also weaken the skeptics’ case.

It is worth noting that most of the regulatory turmoil in 2023 was concentrated in the US. In contrast, the EU’s MiCA regulation has provided regulatory certainty, and euro-denominated stablecoins backed by financial institutions have begun to emerge. Additionally, digital asset investment and development hubs in Abu Dhabi, Hong Kong, and Switzerland highlight that the future of the crypto sector is not solely dependent on US regulators.

While Bitcoin remains the focus as the market-leading asset, it is important not to overlook Ethereum’s potential. Van Eck predicted an Ethereum (ETH) price of $11,800 by 2030, which may seem bold considering the lack of analysis on ETH prices from traditional institutions. However, there is a strong case to be made that ETH growth will outpace BTC.

Ethereum’s transition from an application layer to a security layer for faster Layer-2 platforms is key to this growth. These Layer-2 platforms support decentralized applications with lower fees and faster throughput. The demand for ETH will increase as these platforms process a significantly higher number of transactions than Ethereum’s base layer. This sustained demand for ETH creates a strong investment thesis.

The success of Layer-2 platforms is crucial for this demand to materialize. As public blockchain technology gains traction among enterprises and financial institutions, there may be consolidation among Layer-1 and Layer-2 platforms, leading to a potential shakeup in the altcoin markets. While this may result in the demise of smaller smart contract platforms, it will also concentrate activity on a smaller number of projects, driving increased adoption and network effects.

Overall, the crypto sector is undergoing significant changes. The weak case made by crypto skeptics in 2024, coupled with positive developments in regulation and the potential for new opportunities, gives reason for optimism among those who have been waiting for the tide to turn.

Hatu Sheikh, the co-founder and CMO of DAO Maker, has played a key role in driving the success of various blockchain-based projects and tokens. With a strong background in marketing and strategy, Sheikh has crafted effective marketing strategies and forged powerful synergies within the industry.