The year of forecasts and predictions is upon the market once more as 2024 approaches on the calendar.
There is a longstanding tradition of forecasting and/or predicting financial markets, and a well-known cliché is the frequency with which market watchers are incorrect. It’s difficult to predict where the rapidly evolving and volatile cryptoasset space will go, particularly in the wake of 2023—a year that itself did not go as planned. This is a difficult but worthwhile task; even if forecasts prove to be inaccurate, the analysis of market trends and key players is a fruitful endeavour in and of itself.
Let’s examine a few potential events in 2024 and consider the implications for the cryptocurrency industry going forward.
Accounting Rules Will Keep Getting Better
The Financial Accounting Standards Board has finally released the much-awaited crypto accounting rule, which is the first of its kind to be published under Generally Accepted Accounting Principles. A valuable first step towards more extensive accounting rules for the space is to permit companies holding cryptocurrency on their balance sheets to report these assets at fair market value and to prescribe additional disclosure and reporting requirements. Even though the accounting standard only covers a limited range of cryptoassets—wrapped tokens, stablecoins, decentralised finance, and non-fungible tokens are not included—it does pave the way for additional advancements in 2024.
Increased openness and uniform enforcement of regulations will only aid in the industry’s mainstreaming.
A Spot ETF Will Be Approved
The least risky forecast for 2024 is probably the approval of a spot bitcoin ETF, since the SEC is presently reviewing several applications. The likelihood of approval is increasing because companies like Wisdom Tree, Invesco, Franklin Templeton, and Blackrock have submitted proposals. There are numerous advantages that such a launch would produce, in addition to the legitimacy that such a product would give bitcoin in the eyes of the general public. These advantages include increased pressure for greater disclosures and transparency, a more sophisticated discussion about the broader role of cryptoassets in the payments industry, and a general reduction in divisive rhetoric that is neither accurate nor helpful. Whichever institution is approved first, this is going to be a good thing for the industry.
Tether Is Going To Be Deplatformed Or Audited
According to a recent S&P report, Tether is subject to heightened regulatory scrutiny, with the issuing entity and the USDT token being deemed high risk. The lack of transparency surrounding issuance policies, uncertainties regarding the makeup of reserves, skepticism regarding the accuracy of attestation and other financial reports, and the unwillingness of Tether leadership to visit the United States are among the reasons, which seasoned cryptocurrency investors will be familiar with. Nevertheless, USDT continues to be the most popular and liquid stablecoin on the market, with a significant presence in both the DeFi industry and decentralised exchange trading.
But with more exchanges delisting USDT and US regulatory agencies continuing to enforce regulations, 2024 is looking to be a critical year for USDT; either resolve the enduring problems or risk more delisting.
Banks in the US Will Accept Tokenized Payments
Another reasonably simple forecast for 2024 is that tokenized payments utilizing enterprise blockchains will be widely implemented by the world’s biggest financial institutions. Among these organizations is J.P. Morgan, whose CEO, Jamie Dimon, has stated that if he had the power, he would personally ban cryptocurrencies in the US. Payment processors have also taken a number of actions to permit, expedite, or at the very least enable tokenized payments in addition to TradFi banks. The ongoing development of cryptocurrency goods and services at PayPal, a well-known brand in the United States with a lengthy history in the space dating back to 2014, is one example of the efforts being made.
Bitcoin Will Top $60,000
Predictions of prices are always a useful tool for assessing the mood of the market; in a recent interview, some analysts predicted that bitcoin would reach a value of $500,000. According to a more cautious estimate, bitcoin will probably surpass $60,000 in 2024 as a result of the previously mentioned factors. This would undoubtedly be a healthy rebound for the industry, even though it is still below all-time highs. Overly optimistic supporters should be aware that large valuation swings that have occurred since 2016 will not be as well-accepted as they were when bitcoin was the preferred asset for non-traditional and retail investors. This is something to keep in mind as more institutional players enter the market.
Given that 2024 is predicted to be an even more exciting year for cryptocurrency than 2023, investors of all kinds should be ready for what lies ahead.
