Significant Events Impacting the Cryptocurrency Industry in 2024

Written by: GracyChen, ET CONTRIBUTORS

Translation: Baihua Blockchain

The year 2023 has been a mixed bag for the cryptocurrency industry. While the downturn that began in early 2022 continued into the first half of 2023, traditional financial giants, such as BlackRock, have brought a glimmer of hope with their Bitcoin ETF applications. This has provided much-needed support for traditional tokens to gain value and break the long-standing bear market. Bitcoin is set to undergo a halving in early 2024, which is expected to trigger a new bull market.

In light of this, there is great anticipation for 2024 in the cryptocurrency industry. This article will outline six key events to watch in 2024 and their potential impact on the market. Understanding these events can help you navigate the cryptocurrency market better and seize investment opportunities. Whether you are an experienced investor or a newcomer to cryptocurrency, this information will assist you in making informed decisions.

1. Approval of Bitcoin ETF and Expectations for Ethereum ETF

The market is highly optimistic about the approval of ETFs, with the U.S. Securities and Exchange Commission (SEC) set to launch a Bitcoin exchange-traded fund (ETF) in January 2024. Institutional investors are considering using Bitcoin as part of their diversified asset allocation strategy. This approval could open new avenues for cryptocurrency investment, attracting more traditional investors who have yet to enter the space. Additionally, it is expected that after the approval of the Bitcoin ETF, the Ethereum ETF will further expand, providing more investment options for the cryptocurrency market.

2. Ethereum Cancun Upgrade and Token Issuance Boom

The Ethereum Cancun upgrade is scheduled for the first quarter of 2024, further unlocking the potential of the Ethereum and Layer 2 (L2) ecosystems. This upgrade is expected to enhance the scalability and efficiency of Ethereum-based applications. With this enhancement, projects utilizing zero-knowledge (ZK) L2 solutions may experience a token issuance boom. The cryptographic technology implemented in ZK L2 projects ensures privacy and security while significantly reducing transaction costs and increasing transaction speeds. Many platforms are actively working on implementing ZK L2 solutions and are expected to benefit from this upgrade.

3. Impact of U.S. Interest Rate Hikes on the Cryptocurrency Market

The U.S. interest rate hike cycle is nearing its end, bringing positive sentiment to the cryptocurrency market. A rate cut could occur as early as May 2024, enhancing the appeal of Bitcoin and other cryptocurrencies. Lower interest rates make alternative investments like cryptocurrencies more attractive, as they offer the potential for higher returns. Many platforms allow users to invest in cryptocurrencies at attractive deposit rates, providing investors with opportunities to capitalize on this trend.

4. Circle's IPO and Adoption of Crypto Stablecoins

Circle, the issuer of the stablecoin USDC, is preparing for an initial public offering (IPO) in the first half of 2024. This move is expected to support the adoption and acceptance of crypto stablecoins. Due to their pegged nature, stablecoins offer more stable value compared to other cryptocurrencies. They have lower volatility and are commonly used for everyday transactions and as a store of value. The new era of bills accepting stablecoin payments allows users to conveniently use this digital asset for bill payments.

5. Bitcoin Halving and Increased Scarcity

Bitcoin will undergo a halving in 155 days, further increasing the scarcity of this digital asset. Bitcoin halving occurs approximately every four years and reduces the block reward received by miners by half. Historically, the increase in Bitcoin's scarcity and the reduction in supply have led to price increases. To illustrate this, let's look at previous halvings:

• Before the 2012 halving event: Bitcoin price was $12 per BTC
• After the 2012 halving event, Bitcoin price reached $260 per BTC
• Before the 2016 halving event: Bitcoin price was $650 per BTC
• After the 2016 halving event, Bitcoin price soared to over $20,000 per BTC

6. FTX Case and Regulatory Clarity

The FTX case has entered its later stages and is facing restructuring. With regulatory clarity expected, new retail funds are anticipated to flow into the cryptocurrency market. Regulatory oversight is crucial for investor protection and market stability. Increased regulatory transparency boosts investor confidence in investing in cryptocurrencies. Cryptocurrency trading platforms should comply with regulations to provide retail investors with safe trading options, ensuring a secure and transparent environment for cryptocurrency investments.

7. Conclusion

The outlook for the cryptocurrency market in 2024 will feature several key events that could shape the future of the cryptocurrency space. The approval of Bitcoin ETFs, the Ethereum Cancun upgrade, the impact of U.S. rate cuts on the cryptocurrency market, Circle's IPO, Bitcoin halving, and regulatory clarity surrounding the FTX case are all factors to watch closely. By staying informed about these developments, you can capitalize on potential investment opportunities in the cryptocurrency market. However, please conduct thorough research before making any investment decisions.