Crypto forecasts for 2024

We all want to know what the future holds, and the crypto world is no exception. In this article we will compare forecasts for the crypto market in the new 2024 year from major representatives of the blockchain world on the one hand and classical finance on the other. We will compare their sometimes very bold expectations for 2024 and try to understand what we should prepare for.
Introduction
Each of us wants to know our future, understand what to prepare for and have secret knowledge about events that have not yet occurred. Unfortunately, or fortunately, we do not yet have such an opportunity. BUT humanity has long learned to make forecasts and sometimes makes them quite successfully.

The crypto world is no exception. Forecasts can be found for any aspect of blockchain technology and for almost any time period. What better time than at the beginning of the year to analyze the most interesting forecasts, draw conclusions for yourself and, perhaps, take some theses into your arsenal for the next 12 months.

For our article, we will take a fascinating journey into the world of cryptocurrency market forecasts for 2024, but with an interesting approach: we will compare the forecasts of two different worlds - the world of traditional finance and the world of blockchain technologies. On one hand, we have Binance, one of the largest cryptocurrency exchanges in the world, with decades of experience in analyzing and predicting cryptocurrency markets. On the other hand, we have a large investment company VanEck, which represents classical finance, long-term investments and has a multi-billion dollar investment portfolio.

We will analyze both reports, identify common themes in them, differences, and try to draw an unbiased conclusion.
Binance Crypto Forecast for 2024 year
Cryptocurrency exchange Binance released its study “The Best Cryptocurrency Trends to Watch in 2024” in mid-December of last year 2023.

The article states that it was prepared by the Binance Research team. They argue that while it is too early to confidently call a bull market, recent developments in areas such as the Bitcoin blockchain, DeFi, stablecoins and NFTs paint a positive outlook for the crypto world in 2024. Below are the top cryptocurrency trends to follow heading into the new year, according to the Binance team:

The Bitcoin price will continue to rise
2023 has been an eventful year for Bitcoin. We witnessed the emergence of the Ordinals protocol, which gave us the concept of Bitcoin NFT. And optimism about the likely approval of a Bitcoin-ETF has led traditional institutional investors to turn their attention to cryptocurrencies.

Increase in value per year:

Source: CoinMarketCap, Yahoo Finance, Binance Research (December 5, 2023)

BTC has grown by 162% in 2023, outperforming the growth of other assets. In 2024, BTC is expected to continue to rise. Key events that could affect its price include the following:
US Spot BTC ETF Approvals
The possibility of creating regulated Bitcoin spot exchange-traded funds (ETFs) has long been discussed in the United States. In 2023, positive changes took place in this direction. In August, US courts ruled in Grayscale's favor, prompting many other players to file their own bids for spot BTC ETFs. The SEC is reviewing a total of 13 such applications. The final decision on them will be made between January and August 2024.

Final SEC decision deadlines for spot BTC ETFs:

Source: Bloomberg, Binance Research

Bitcoin halving
Bitcoin miners receive block rewards and transaction fees. The block reward is paid for each new block and is halved every four years.

Halving helps in creating scarcity of Bitcoins and increasing their value. The block reward is currently 6.25 BTC and will decrease to 3.125 BTC around April 2024.

Reward per block after halving:

Source: Binance Research

Ordinals
In 2023, the Bitcoin network launched a new update that made it possible to track individual satoshis. This update is called Ordinals and allows users to store custom content such as text, images, videos on individual satoshis. That is, in essence, a “Bitcoin NFT”. This in turn led to the creation of BRC-20 tokens.
Increasing supply of stablecoins as a sign of recovery in the crypto market
Stablecoin supply is the total number of tokens that can be created and circulated and therefore investable. In the fourth quarter of 2023, the supply of stablecoins increased for the first time since the first quarter of 2022. This may indicate increased interest.

It's worth keeping an eye on this metric in the coming months to see if it continues to rise. If so, it could be a sign that the cryptocurrency market is on the road to recovery.

Quarterly supply changes for the five largest stablecoins:

Source: DeFiLlama, Binance Research (November 30, 2023)

Growth of the NFT market
It would seem that the hype is gone and NFTs are a thing of the past, but not everything is so simple. NFT trading volumes dropped to historical lows, but in October this trend reversed and the market began to grow.

The key is the rise of Bitcoin NFTs, which were the most popular type of NFT in November with more than $375 million in trading volume. This is an achievement for Bitcoin, as it has long been considered unsuitable for NFTs (beyond peer-to-peer (P2P) transactions).

NFT trading volumes in 2023:

Source: CryptoSlam!, Binance Research (November 30, 2023)

The growth of network commissions as a sign of increasing stability of the crypto market
Commissions in the crypto industry are growing. In November 2023 they were 88% higher than in January. The increase in fees could be caused by several factors, including growing demand for cryptocurrencies, the development of new applications and lower inflation.

Commissions for the 20 largest crypto projects in different sectors:

Source: Token Terminal, Binance Research (November 30, 2023)

Ethereum is the largest fee generator in the crypto industry, followed by DeFi and NFT protocols.

In general, commission generation is an indicator of sustainable business models, so an increase in these numbers throughout 2023 is likely a positive sign.
Development and growth of Layer 1 networks
Ethereum remains the premier L1 smart contract, but alternative L1 solutions have also performed well in 2023, some even outperforming Ethereum. In 2024, it will be important to monitor this trend to see if Ethereum will maintain its leadership in the L1 segment.

Changes in market capitalization of the main alternative L1 networks during 2023

Source: CoinMarketCap, Binance Research (November 30, 2023)

Solana and Toncoin were the two most successful L1 networks in 2023. Solana showed significant results in 2023, with the capitalization of the SOL token growing by 56% by November. Toncoin has also made great progress, announcing a partnership with Telegram in September.

Leading L1 networks were also active, with Ethereum allowing ETH staking after the April update, and BNB Chain launching the opBNB L2 network and BNB Greenfield storage platform.
The growing popularity of SocialFi (social networks on the blockchain)
SocialFi is a new trend in the crypto industry that combines DeFi and social networks. SocialFi has made significant progress in 2023, and one of the most successful projects in this sector is friend.tech and has attracted strong attention.

Transaction amount and commission friend.tech

Source: Dune Analytics (@cryptokoryo), Binance Research (November 30, 2023)

By the end of November, Friend.tech was able to earn over $25,000,000 in commissions alone. After a surge in August and September, its daily activity has slowed over the past couple of months. But it is worth noting that the product is still in beta mode, and a full launch is expected in the near future.

The focus on friend.tech, especially non-crypto investors, points to the potential of social networking on Web3. It is worth noting other notable projects in this area - Farcaster, Lens Protocol and Binance Square.
VanEck Crypto Forecast for 2024 Year
Analysts at the investment company VanEck believe that in 2024 the crypto market will develop against the backdrop of the economic crisis in the United States. They predict that Bitcoin will reach a new all-time high, and Solana will enter the top 3 projects by market capitalization.

We have reviewed all 15 forecasts from VanEck and will briefly tell you their essence.

The US will experience an economic recession in the first half of 2024, but with it the first Bitcoin ETFs will appear!
VanEck analysts believe that the US economy is on the verge of a recession. This is evidenced by record lows in leading indicators such as corporate bankruptcies, employment rates and retail health. In the event of a recession, Bitcoin, like other risk assets, can fall significantly, but then quickly recover, as it did in 2020. Then the rate fell by 60% and recovered after the Fed provided sufficient liquidity.

“We expect more than $2.4 billion to flow into the newly approved US spot Bitcoin ETFs in the first quarter of 2024 to keep the price of Bitcoin high. Despite the potential for significant volatility, the Bitcoin price is unlikely to fall below $30K in the first quarter of 2024.” VanEck stated.
The fourth Bitcoin halving occurs with minimal “drama”
According to expert forecasts, the upcoming Bitcoin halving in April 2024 will likely take place without significant events. It is possible that miners operating at a loss may exit the market, but after a short period of stabilization, the Bitcoin rate is expected to rise above $48,000.

Drawdown of investment capital (scale on the right) by the number of days after halving (scale on the bottom):

Source: Bloomberg, VanEck research as of 11/30/23

Bitcoin to reach all-time high in Q4 2024
The second half of 2024 could be favorable for Bitcoin. If the rate of the first cryptocurrency reaches $100,000 by December, this will mean that Bitcoin has overcome another barrier and continues to strengthen. In this case, Satoshi Nakamoto, who created Bitcoin, can be named “Person of the Year” according to Time magazine.

Bitcoin cycles and forecast for further price growth:

Source: Bloomberg, VanEck research as of 11/30/23

Ethereum will not be able to surpass Bitcoin
According to VanEck analysts, Ethereum will not become the first cryptocurrency by capitalization, but it may surpass technology stocks in profitability. A clearer regulatory status for Bitcoin will increase interest in it from organizations in Latin America, the Middle East and Asia. Argentina could become the fifth country to sponsor bitcoin mining at the government level, joining El Salvador, the UAE, Oman and Bhutan.

Bitcoin Mining Investments ($M) by Country and GDP Comparison (Ball Size):

Source: Bloomberg Intelligence as of 08/31/23

EIP-4844 Ethereum update will reduce fees and improve network scalability
The EIP-4844 update will reduce transaction fees and improve the scalability of L2 networks (Polygon, Arbitrium, Optimism, etc.). This may lead to the fact that one of the L2 networks will overtake Ethereum for the first time in terms of blocked value (TVL). Within a year after the Ethereum upgrade, the L2 network sector is consolidating to several dominant players.

The share of Ethereum in DEX trading volumes:

Source: Artemis.xyz от 03.12.23.

NFT activity will reach an all-time high
The NFT market is expected to reach an all-time high in the coming months. Investors are showing interest in NFT collections on Ethereum, as well as new offerings based on Ordinals. This trend is likely to continue into 2024.

NFT trading volume by Bitcoin and ETH:

Source: Cryptoslam! as of 11/28/2023

Binance will lose first place in spot trading
Over the course of 2024, Binance will lose its leadership in the spot trading market as competition is expected to increase from other exchanges, including OKX, Bybit, Coinbase and Bitget. Coinbase's share of the futures market is also projected to increase from $200 million per day to approximately $1 billion.
Stablecoin market capitalization will reach a new all-time high
According to analysts at VanEck, the total market capitalization of stablecoins is expected to reach more than $200 billion, which would be an all-time high. However, the situation could change for Tether if the US government takes action against Justin Sun, the founder of the Tron protocol.
Spot trading share of the DEX market will reach a new all-time high
Decentralized exchanges (DEX) market share is expected to reach an all-time high as high-performance networks like Solana offer users a more convenient and faster trading experience.

DEX: CEX Spot Trade Volume

Source: The Block, The Graph, Coingecko as of 11/28/2023.

New trend in 2024 - liquid Bitcoin staking
Bitcoin liquid staking could become popular in 2024 as the Lightning Network allows users to earn staking rewards without having their funds locked up. Protocols like Amboss make it easier to manage liquid staking, and federated self-custody solutions like Fedi give users control over their funds.
A breakthrough blockchain game is finally coming out
Analysts believe that in 2024, one of the games on Web3 will reach 1 million active users per day. One candidate for this achievement is the Immutable X project, which could enter the top 25 coins by market capitalization thanks to the release of such big-budget games as Illuvium and Guild of Guardians.

According to experts, the Immutable X team is working to solve technical problems that have so far hampered the development of games on Web3. For example, the company is developing a scaling solution that will allow games to support large numbers of users without sacrificing performance.

Investing in Web3 games:

Source: DappRadar from 10/12/2023

Solana will be among the TOP 3 blockchains by market capitalization
Solana is likely to be one of the top 3 blockchains based on market capitalization, total value locked (TVL) and active users. This growth will likely see Solana join the ETF spot wars as asset managers apply to launch ETFs on Solana.

Pyth, a price oracle based on Solana, has the potential to become a market leader. Currently, Chainlink dominates the market with a TVS of ~$15 billion, while Pyth has a TVS of less than $2 billion. However, as TVL continues to grow on high-throughput chains and Chainlink struggles to gain institutional adoption of its LINK token, Pyth could gain significant market share.
DePin networks will become one of the trends in 2024
Decentralized physical infrastructure networks (DePINs) are becoming increasingly popular. Experts note the development of two promising projects: the decentralized mapping protocol Hivemapper and the Helium network of wireless access points.
Crypto companies will change their approach to reporting
Coinbase will be the first public company to disclose revenue from the Base Layer 2 network in its quarterly reports. The Base network will generate more than $100 million in annual revenue and will become a significant source of revenue for Coinbase.

New FASB guidelines that allow companies to record profits from cryptocurrencies at market value will encourage additional disclosure about cryptocurrencies. This could have a positive impact on corporate preference to hold Bitcoin and other digital assets as treasury assets.
DeFi will increasingly use Know Your Customer (KYC) principles
KYC-enabled apps and “Hooks” (tools that allow developers to modify code without changing the underlying version of the program), such as Uniswap Hooks, will become more popular than apps without KYC. This is because institutional investors prefer to use applications with KYC, and also because Uniswap Hooks allow new DeFi participants to participate without the risk of interacting with sanctioned entities.

The implementation of Uniswap Hooks will help the protocol attract more institutional liquidity and volume, which in turn will lead to higher protocol fees. In addition, Hooks will help Uniswap strengthen its competitiveness, which could lead to an increase in the value of the UNI token.

Market shares of decentralized exchanges:

Source: DefiLlama as of 11/28/23

Conclusion
It is not surprising that representatives of the crypto world and classical finance look at the prospects of blockchain technologies differently. This can be seen in the number of forecasts, their depth and focus.

But we cannot help but note similar forecasts from both companies, namely:
Continued growth in the price of Bitcoin.
Revival of the NFT market.
Strengthening and development of stablecoins.
Development and popularization of new blockchain technologies and projects.
What is striking is that both Binane and VanEck agree on positive forecasts for the crypto world. They agree that the market will continue to grow and strengthen stability.

Although we at AML Crypto do not believe in predictions, we are wary of forecasts and rely only on facts... I would like to believe that these 4 points described above will turn out to be true.
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