As we approach the end of 2023, eyes turn to the uncertain, but exciting future of the crypto market. Against this backdrop, VanEck, a recognized asset management firm, has shared its bold predictions for 2024. These predictions, which cover topics ranging from the potential approval of a Bitcoin ETF to the changing dynamics of altcoins and NFTs, offer a fascinating glimpse of what the year to come might hold. With proven expertise in the financial sector and a keen eye on emerging trends, VanEck’s 2024 outlook promises to be a valuable guide for navigating the ever-changing world of crypto.
The crypto ecosystem, between economic challenges, halving and the surge in BTC
In 2024, VanEck expects the crypto industry to navigate amid economic headwinds. According to the asset management company, the start of 2024 should be characterized by a slowdown in economic dynamics and generally bearish indicators in particular.
In this context, the expected approval of spot Bitcoin ETFs in the United States is a momentous event. For good reason, the American economy being vulnerable, more than 2.4 billion dollars should flow into these ETFs in the first quarter of 2024. A prospect which, according to analysts, would support the prices of bitcoin (BTC) above 30,000 dollars, on average.
Based on historical precedent for the SPDR Gold Shares (GLD), the gold-backed ETF, VanEck projects an initial inflow of $1 billion. This will be supported by an accumulation of $2.4 billion at the end of the quarter. Overall, a faster adoption rate of Bitcoin ETFs is anticipated. Once mature, this market could capture 1.7% of the entire spot market, or $40.4 billion in the first two years of operation.
Regardless, certain data leads the firm’s analysts to say that the price of bitcoin (BTC) could literally explode. Among these elements, there is the optimistic outcome of certain elections around the world, the abandonment of the anti-growth agenda, all driven by potential regulatory changes. If all these circumstances go in the right direction, the flagship crypto would then reach an all-time high of $100,000 in December 2024. Not to mention that the asset could attract interest from entities in the Middle East, Asia and Latin America . Argentina expected to become 5e countries around the world to approve bitcoin mining at the state level.
Ethereum will consolidate its 2e place while NFTs explode
Regarding Ethereum, the predictions are clear. Ethereum is unlikely to overtake Bitcoin in 2024. That said, the second largest crypto on the market will consolidate its position to outperform the others. According to experts, this projection is based on the fact that during 2024, Ethereum is expected to lose crypto market share due to its scalability problems. This, for the benefit of other blockchains like Solana.
Despite its challenges, there is a possibility for ETH to surpass BTC in terms of performance. But this option would only materialize for a period of time, without leading to a complete change in their respective positions on the market.
On another note, analysts believe that with the implementation of EIP-4844 (proto-danksharding), Ethereum layer 2 solutions are expected to dominate TVLs. But, also, volumes compatible with Virtual Execution Environments (EVM), designed to execute smart contracts on the Ethereum blockchain. This would result in lower transaction fees which will increase the possibilities of arbitrage and trading on layer 2s such as Polygon, Arbitrum and Optimism. These latter two blockchains are emerging as key competitors, propelled by liquidity consolidation.
In addition, NFTs will not be left behind. Activity involving these digital assets is expected to reach a record high in 2024, driven by crypto speculation. In this context, improved crypto games, new bitcoin (BTC)-based offerings and top NFT collections from Ethereum will attract attention. It is estimated that despite Ethereum’s historic dominance in NFT sales, the primary ETH-BTC NFT issuance ratio will narrow to 3-1 by the end of 2024.
Binance dethroned, the DEX and the crypto marketcap at the top!
If there is one word that characterizes the year 2023 of the crypto exchange Binance, it is “disappointment”. The company will have to deal with this word next year. Because, it is estimated that it will lose its dominance in the crypto market. A direct consequence of its recent $4 billion settlement with American regulators. Rivals like OKX, Bybit, Coinbase, and Bitget, which have ample funds, are expected to grab that coveted top spot.
At the same time, the decentralized exchange (DEX) market involving spot crypto exchanges would reach new heights. This, as Solana will improve the efficiency of on-chain exchanges. Advanced wallets, which offer security services“account abstraction” for automated payments, will encourage users to opt for on-chain and crypto self-custody solutions.
Furthermore, analysts believe that the post-halving bitcoin era, with the decline of the dominance of BTC and ETH, could propel the market for decentralized exchanges. The accelerated growth of the long list of assets could influence trading preferences in favor of DEXs listing cryptos.
Other major developments planned!
In 2024, the crypto ecosystem will experience major developments conducive to optimizing bitcoin returns. Fund transfers and smart contracts on blockchain will further open the way to new perspectives, particularly in emerging crypto markets. For example, bitcoin staking is expected to gain in importance, due to transaction costs, with innovations such as Amboss and federated treasury solutions.
The coming year could mark a significant turning point for blockchain-based games, with the prospect of surpassing one million daily active users. This anticipated growth would be driven by key players such as IMX and the AAA level titles developed by Immutable.
In the same vein, analysts expect Solana to outperform. A result that would rank the blockchain among the top three blockchains in terms of market capitalization, TVL and active users. Thus, Pyth, price oracle on Solana, could surpass Chainlink thanks to its innovations. Furthermore, decentralized physical infrastructure networks (DePin) could gain ground in 2024. We are already seeing players like Hivemapper and Helium playing spoilsport.
Another major development concerns decentralized finance (DeFi). This crypto segment is expected to integrate KYC, with Ethereum Attestation Service and Uniswap hooks leading the way. A prospect that would strengthen the competitiveness of Uniswap thanks to protocol fees linked to KYC. As a result of this projection, the anticipation of an increase in the valuation of Uniswap’s native crypto after the DAO’s vote to activate the change in protocol fees.
Conclusion
If we must remember one thing from this projection, it is that the year 2024 promises to be full of challenges for the crypto ecosystem. But she also seems to be reaching out to a lot of opportunities. Indeed, VanEck analysts predict a period of economic turbulence at the start of the year. However, the expected approval of Bitcoin ETFs in the United States could support BTC prices well above $30,000. As for Ethereum, although facing scalability challenges, it is expected to consolidate its position in the crypto market. Likewise, NFTs will continue to attract attention. Just like Binance which, after its recent significant financial settlement, could lose its dominance to its competitors. In this context, DEXs and crypto marketcap should prosper. This, while major crypto developments, such as bitcoin staking and the integration of KYC in DeFi, are anticipated. Ultimately, 2024 promises to be a pivotal year with significant transformations in the crypto landscape.
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