Table of Contents
- Trend 1: The Surge of Bitcoin
- Trend 2: Coinbase’s Growth Trajectory
- Trend 3: Ethereum’s Rising Tide
- Trend 4: The Stablecoin Revolution
- Trend 5: On-Chain Innovations for Traditional Finance
- Trend 6: AI, Decentralization, and Crypto
- Investor Takeaway
Key Takeaways
- Bitcoin is expected to increase in value in 2024, driven by factors like the approval of bitcoin spot ETFs and the upcoming bitcoin halving event. These developments are expected to attract more investors and increase demand.
- Coinbase will continue its growth momentum into 2024, potentially doubling its revenue. This growth is attributed to increased bitcoin demand and higher institutional adoption due to the approval of Bitcoin ETFs.
- Ethereum could grow substantially, with an upgrade (EIP-4844) enhancing transaction throughput and reducing costs. Additionally, the integration of AI in the crypto industry is foreseen to bring significant improvements in transaction analysis, efficiency, and security.
Introduction
In 2023, we saw a resurgence in bullishness in the crypto industry, and we expect to see the same energy carry over into 2024 as increasing adoption, revenue growth, and the integration of new technologies are on the horizon.
However, new tokens and assets, uncertain regulations, security concerns, and technological innovations speak to the industry’s dynamic nature. This can make it challenging to predict upcoming trends, let alone keep up with them.
That said, we see some emerging trends that will help fuel the excitement 2023 brought to the crypto industry. These trends include a surge in bitcoin’s value, Coinbase’s revenue growth, the increasing adoption of Ethereum, the rising influence of stablecoins, and the integration of advanced technologies like AI in crypto.
Read more about the crypto trends we see shaping the industry in 2024.
Trend 1: The Surge of Bitcoin
In 2023, we saw bitcoin rally 150% higher, and at the beginning of January 2024, we saw its price surge to over $47,000. Analysts predict bitcoin’s price rise will continue throughout the year, with the potential to reach an all-time high and hit $80,000 before year’s end.
Bitcoin’s price trajectory is strong. Chart via Coinmarketcap.com
There are a couple of factors at play that support this prediction. For one, there’s the SEC’s approval of a spot bitcoin ETF, which puts bitcoin within the reach of ordinary investors, directly within their brokerage accounts.
Traded on stock exchanges, bitcoin spot ETFs hold bitcoin as their primary asset and directly track the price of bitcoin, therefore providing investors with price exposure without directly owning the asset. This should help bitcoin appeal to a broader range of investors, leading to increased demand and a price increase.
Another factor that could lead to a surge in bitcoin price is the halving event, which is set to take place in April 2024. These halving events occur roughly every four years, the last occurring in May 2020. Bitcoin halving cuts the reward for bitcoin mining in half, meaning miners receive 50% fewer bitcoins for verifying transactions. Historically, these halving events have been associated with price increases as a reduced rate of new bitcoin creation leads to scarcity, eventually increasing demand and price.
Trend 2: Coinbase’s Growth Trajectory
Coinbase is the largest cryptocurrency exchange in the US by trading volume, and the company has spent years building brand authority with investors, giving them pricing power. 2023 saw Coinbase’s stock soar 418%, and its revenue saw a 14% increase. The company is well-positioned to carry this growth into 2024, with the potential to double its revenue.
Coinbase shares have outpaced even bitcoin.
The bitcoin ETF and bitcoin halving event are two of the main catalysts for the predicted growth at Coinbase, as both events should lead to an increased demand in bitcoin, which accounts for most of the platform’s trading volume.
The approval of bitcoin ETFs will also likely lead to an increase in institutional adoption, as insurance companies, pension funds, and other institutional investors who would otherwise be reluctant to engage with crypto will be more likely to invest, as ETFs offer a regulated and well-known investment structure. Coinbase is thus far the sole custody provider for all the proposed bitcoin ETFs. which should generate substantial revenue in the form of custody fees.
Trend 3: Ethereum’s Rising Tide
Ethereum will also likely see rapid growth in 2024, with some analysts predicting its revenue will double.
This is partly due to a scheduled critical upgrade known as EIP-4844, which is expected to occur in the year's second half. The upgrade will boost throughput to 100,000 transactions per second and reduce transaction costs by as much as 90%, making the network more accessible to mainstream users and driving adoption.
Over the years, Ethereum has made significant efforts to improve the adoption of crypto projects. Ethereum offers smart contract functionality, serves as the primary platform for the DeFi ecosystem, provides a framework for tokenizing and selling NFTs, and enables the creation and issuance of new tokens. In short, it acts as a foundation for the growth of various crypto projects, and the reduced transaction cost will only make the platform more appealing to its users.
Trend 4: The Stablecoin Revolution
While most of the attention leading into 2024 has centered around bitcoin, investors want to keep their eyes on stablecoins in the coming year.
In the latter half of 2023, JP Morgan announced an improved tokenized payment platform, PayPal launched its stablecoin, and Visa expanded its stablecoin settlement capabilities. These events complement the optimistic forecast predicted for stablecoins in 2024, as Bitwise predicts that stablecoins will surpass Visa in terms of settled volume.
In 2023, we also saw significant advancements in stablecoin regulation. According to Cointelegraph, 25 countries had stablecoin regulations in place last year. The US will likely act on stablecoin regulation in the coming year. Doing so will give the US a mechanism to oversee adoption and ensure its central role in supervising and regulating stablecoin issuers. Additionally, it’ll allow the US to serve as a home for growing businesses that will likely be strategically significant in expanding the role USD and other stablecoins play in the global economy.
Trend 5: On-Chain Innovations for Traditional Finance
We will also likely see a rise in on-chain innovations in 2024. In 2023, JP Morgan collaborated with a handful of blockchain firms to demonstrate how proof of concept could allow asset managers to tokenize funds on a blockchain of their choice and purchase and rebalance their positions in tokenized assets across multiple chains.
The demonstration coincides with the traditional financial sector’s growing interest in crypto and blockchain technology. In 2024, we will see more traditional finance companies explore on-chain innovations through partnerships and services as regulatory clarity improves.
Trend 6: AI, Decentralization, and Crypto
Integrating AI tools into the crypto industry holds immense potential, and we expect to see some of this potential come to fruition in 2024. More companies will use AI algorithms to enhance transaction speed, analyze transaction data, and improve efficiency and security.
AI trading tools will also become more refined and user-friendly, making crypto trading more accessible to many investors. AI will also be integral to real-time sentiment analysis, regulatory compliance, and forecasting. Additionally, we will likely see the rise of AI-powered personal trading assistants capable of learning an individual trader’s risk appetites and preferences to offer customized advice and manage trades.
2024 will also likely see the growth of decentralized prediction markets. While prediction markets have existed for years, crypto takes them to the next level by making them permissionless and borderless and automating functions like making payouts and determining winners and losers. We expect decentralized prediction markets to become a primary venue for sports-based and event-based wagering.
Lastly, you can expect financial advisors to allocate to crypto in 2024 increasingly. According to a Bitwise survey, 98% of financial advisors with crypto allocations in client accounts plan to maintain or increase that exposure in 2024.
Investor Takeaway
As you can see, many exciting crypto trends are emerging in 2024. Analysts predict that bitcoin will rise in price and prominence, Coinbase’s revenue will grow, Ethereum will establish itself as a powerhouse, and stablecoin adoption will increase.
We can also expect more financial companies to explore on-chain innovations and AI playing a more prominent role in the crypto world. If you’re currently invested in crypto, we recommend regularly looking at your portfolio to determine how these trends may affect your investments.
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