The cryptocurrency market remains lively and has become more diverse than it was in the past. While 2022 witnessed a great deal of fluctuation in the market, it also looked more like a global phenomenon rather than just a speculative movement of cryptocurrencies. Considering the developments in the field of cryptocurrencies in the years 2023 and 2024, there are several trends that seem to be potent in the future. It is only essential for investors to be acquainted with such trends as they will assist the investors to make better decisions. The following are some primary shifts for cryptocurrency analysis by Stanley Bae for the coming year that this article covers.
Institutional Investor Interest
Institutional investors’ entrance into the crypto market is arguably the biggest craze around crypto assets right now. Banks such as investment banks have joined the trend of funding cryptocurrencies through ventures like hedge funds. Some of the reasons include, First, the fact that there is a possibility of growth in cryptos and, secondly, the ability to diversify the asset.
That’s why, in 2024, we hope more of the large institutional investors to approach crypto investing. Even firms of Fidelity and BlackRock scale have started making some movements. Due to their large capital injections, this will, in turn, affect the prices. It also adds more weight to the idea of cryptocurrency as a whole in the future. That will be important to monitor this institutional activity.
Central Bank Digital Currencies
As of now, most large central banks in the world are in the process of planning and implementing Central Bank Digital Currencies or CBDCs. CBDC then refers to a form of fiat money that is issued by a country but in a digital format. It is controlled by the central bank of that particular country.
By 2024, it could very well be those countries such as China, Japan, and the USA that launched CBDCs at a larger scale. CBDCs hold great potential to shift the payments landscape if they gain wide acceptance. They also have implications for other cryptos that are even more decentralized like BTC.
CBDCs have attracted the attention of the crypto community since they are an aspect of crypto adoption by governments. The role that it will play in other stable coins and other cryptos has not been fully felt next year.
Regulation and Policy Changes in Crypto
The third large trend is the threats of changes in policies that govern this market and the changes to the rules regarding cryptocurrency. Several global authorities signalled increased regulation scrutiny on cryptocurrencies in 2024. There are emerging laws, such as the EU Markets in Crypto-Assets law, that are expected to come into force soon.
The candidates likely to be more heavily regulated are stablecoins, decentralized finance, protection of investors, taxes, anti-money laundering laws, etc. The effects may hinge on some aspects of the crypto market. But they also could positively affect the confidence of mainstream in cryptocurrencies in case of more policy related signals.
Non-Fungible Tokens (NFTs)
Another emerging type of digital asset that has recently been in focus is non-fungible tokens (NFTs). Stanley Bae says these digital assets need blockchain to create ownership of one-of-a-kind things such as artworks, songs, movies, posts, virtual streets, and much more. Prominent NFT marketplaces are OpenSea, Rarible, SuperRare and more, where people are actively trading these assets.
Even though critics were quick to label it as a mere craze, NFT trading saw over $10 billion in volume in Q3 2021 alone. In the light of metaverse and Web 3 projects emerging, NFTs and other exclusive digital assets and services indeed have their demand. Since creators are pushing for NFTs and new application cases appear, some are saying that down the line, it might subvert whole sectors.
What Is The Future Scope?
As cryptocurrencies attract more users into the market, it becomes essential to have proper structures put in place for future growth and to hinder the vice. Taxation, regulation on how and when to allow banking facilities for cryptocurrencies, and the legal status of cryptocurrencies are all part of policymaking in the case of Crypto assets. It means that those countries that can achieve balanced regulatory clarity earlier have a competitive advantage compared to other countries in terms of the attraction of crypto projects.
Conclusion
Crypto as an asset class market continues to grow more and is progressing fast, according to Stanley Bae. After institutional adoption, CBDC adoption and policy changes can be insightful in understanding market trends in the year 2024. To avoid missteps and make informed decisions, all market members should be aware of these important trends in cryptos. Like any risk asset class, a lot of research should be done before one decides to invest in them.
