Top 5 Cryptocurrency & Blockchain Trends to Follow in 2024
As we’ve stepped into December, it’s time we reflect on the year and speculate for 2024.
While we’re still digesting some recent bombshells, such as Sam Bankman-Fried CEO of FTX guilty verdict, or Changpeng “CZ” Zhao stepping down from Binance, we are excited about what’s coming next.
With the current $1.48T crypto market capitalization, there’s a mix of great ideas and shady stuff happening in the space. Now, the question arises: how do we predict the next big wave to ride?
Let me guess the top 5 things to keep an eye on in 2024.
1. Spot Bitcoin ETF approval by the SEC
Some asset management companies, including BlackRock, Grayscale, Fidelity, WisdomTree, and others, are anticipating the approval of the first U.S. spot Bitcoin exchange-traded fund (ETF) in 2024.
As we are still waiting for the regulators to give the green light, there are ongoing speculations whether it will bring profits to the table, since there are already plenty of ways to purchase Bitcoin at the first place.
So, is there genuine interest in Spot BTC ETFs?
According to a new Digital Assets Council survey
‘Only 12% of financial advisors currently recommend bitcoin to clients, but more than three-fourths of advisors (77%) say they will recommend a spot bitcoin ETF when they become available’
Alex Thorn, a researcher from Galaxy Digital, is also bullish:
Some believe that Spot ETFs could reduce the impact of crypto whales, potentially making Bitcoin less volatile and boosting liquidity. On the other side, there are those who argue that introducing Spot ETFs might actually increase volatility.
2. The rise of diverse Ethereum Layer 2 Solutions
Given the ‘Ethereum Rollup-centric roadmap’ and the upcoming EIP-4844: Proto-Danksharding, expected to launch in Q4 2023, intruducing a novel Ethereum transaction type known as ‘blobs’ of data, the community envisions the possibility of a new revenue stream.
With ‘Blobs’ playing a key role in facilitating the transition to rollups, we shoudn’t be surprised that L2s are on everybody’s lips.
Rollups attract users with low fees, decreased latency (the time taken for a transaction to be processed) and increased the transaction throughput (the number of transactions the system can process per second).
If you’re curious to learn more about the topic, you can check out my previous blog post:
According to L2Beat, there are currently 32 companies in the market related to rollups, with a total Value Locked of $14.87 billion.
Everyone want a slice of the pie:
3. Ethereum ‘Restaking’
As users try to make the most out of their assets, new investment ideas, such as ‘Restaking’ are emerging.
With a hefty 32ETH lockup required to become a validator and ensure the security of the ETH network, community saw the emergence of liquidity staking solutions like Lido and Rocket Pool. These platforms allow users not only to stake any amount of their tokens but also receive liquid tokens, serving as collateral in DeFi and potentially earning extra yield.
But ETH users want options.
With a strong market position and longstanding history currently more than 28 million ETH are staked making the chain secure. However, it’s a challenge for new chains to attract users to stake their crypto and secure their chain.
EigenLayer, a protocol built on Ethereum, introduces restaking, a new element in crypto-economic security. It allows ETH stakers to simultaneously use their stake as a deposit in another protocol.
Pros: Easier to secure new networks without the need to figure out incentives for validators.
Cons: Vitalik expressed concerns that restaking might introduce risks impacting the network’s safety. ‘We should tread lightly when application-layer projects aim to extend the scope of blockchain consensus beyond the validation of essential Ethereum protocol rules.’
4. Proving Identity in the Digital World
In an AI era, with deepfakes and scams, it’s tricky to identify if digital conted was created by real human-being or AI. There is growing trend around prooving digital identity or digital attestations.
Ethereum Attestation Service (EAS) is a layer built on top of Ethereum that allows us to collect attestations and aggregate them to build our Digital Identity, introducing trust in online interactions.
In essence, attestations are digital signatures, i.e. digital stamps of approval, that allow people or groups to vouch for certain information. Toward this end, EAS uses a set of smart contracts on Ethereum to provide a structured and standardized approach to these attestations, ensuring their authenticity and integrity.
(Source: Bankless)
Worldcoin, established in 2019 by OpenAI’s CEO Sam Altman and others, introduces World ID — a privacy-preserving digital identity network based on proof of personhood. With a digital currency (WLD) aligning incentives, Worldcoin aims to provide evidence of human identity. The solution utilizes the Orb, a custom biometric device, and assumes ‘proof of personhood’ is a vital digital primitive.
5. Ongoing Competition in European Crypto Custody
More and more European institutions are entering crypto custody space:
This list was just a glimpse into the crypto space.
There’s definitely a lot to explore for the curious, including Blockchain & AI, upcoming regulations (MiCA), interoperability topics, and more.
What are your predictions for the upcoming year?
