Global investment management firm VanEck’s predictions for crypto for 2024 point to a transformative year for the sector, highlighting pivotal events and trends that will redefine the digital asset landscape, from economic fluctuations to game-changing technological advances.
The predictions are based on analysis that goes beyond the crypto sector, looking at economic trends, technological developments and regulatory dynamics. From the intertwining of the expected US recession with the launch of spot Bitcoin ETFs, aiming to strengthen Bitcoin’s resilience above $30,000, to the fourth Bitcoin halving poised to boost market value, these predictions highlight pivotal moments in the journey of crypto.
Furthermore, VanEck’s outlook predicts that Ethereum will maintain its position under Bitcoin’s market dominance, while simultaneously surpassing major tech stocks and facing competition from other smart contract platforms. The NFT market, which will be fueled by both Ethereum and Bitcoin by 2024, is expected to reach new heights and reshape the digital collectibles landscape. Meanwhile, the stablecoin realm, especially with USDC, is expecting unprecedented growth.
The predictions also highlight the potential shift in the currency’s supremacy, with Binance’s leading spot trading position being challenged by emerging rivals. Furthermore, DEXs are expected to claim a significant share of the spot trading market. A breakthrough is expected for blockchain-based gaming, with the game surpassing one million daily active users, marking a milestone in mainstream adoption. Furthermore, Solana’s rise to a top-three blockchain position, along with the rise of DePi networks such as Hivemapper and Helium, anticipates widespread diversification within the blockchain ecosystem.
Finally, a key area highlighted by VanEck is the integration of Know Your Customer (KYC) protocols into decentralized finance (DeFi), which is expected to usher in a new era of institutional participation. This, along with new corporate accounting treatments for crypto holdings, signals a shift towards mainstream and institutional adoption of cryptocurrencies.
VanEck predicts that spot Bitcoin ETF will be approved in the first quarter.
VanEck predicts the U.S. economy will enter a recession in 2024 amid slowing economic momentum and cooling inflation. This downturn, marked by 19 months of consecutive declines in leading indicators, weak commodity markets and rising corporate bankruptcies, provides a challenging backdrop. Still, in this economic landscape, the debut of the first US spot Bitcoin ETFs will be approved in the first quarter.
VanEck predicts that these ETFs will attract substantial investment, drawing a parallel to the early success of the SPDR Gold Shares (GLD) ETF launched in 2004. The GLD ETF saw rapid inflows and captured a significant portion of the gold market in the first quarter. Applying these numbers to Bitcoin, adjusted for the higher money supply of the current era, the prediction is a notable initial inflow of around $1 billion, potentially reaching $2.4 billion within a quarter for Bitcoin ETFs.
This significant capital flow into Bitcoin ETFs reflects a deeper shift in the financial landscape. With the US Federal Reserve’s M2 money supply significantly higher than at the launch of the GLD, the potential for Bitcoin ETF inflows is increased, leading to an estimated $40.4 billion over the first two years. This rise is partly driven by a predicted preference for Bitcoin as a form of ‘hard money’ amid concerns about sovereign debt and inflation, positioning it among investors as an alternative to gold.
Additionally, the expected lower transaction costs of these ETFs, compared to current retail trading costs, indicate the potential for broader market adoption. Such cost efficiencies have historically catalyzed the widespread adoption of new technologies and could similarly propel Bitcoin ETFs into the financial mainstream. Despite the looming recession and potential market volatility, these developments indicate robust demand for Bitcoin, potentially keeping the price above $30,000 in early 2024.
Impact of the Bitcoin halving and the new Bitcoin ATH.
VanEck predicts that the fourth Bitcoin halving, scheduled for April, will proceed smoothly without major disruptions. This halving will likely lead to the shutdown of unprofitable miners, shifting the landscape to those with more efficient, cheaper energy solutions. Despite the initial adjustment period, during which the market could see some consolidation, Bitcoin’s value is expected to rise. VanEck predicts that Bitcoin’s price could cross the $48,000 mark after the halving, in line with the technical pattern observed in April 2022. This upward trend is expected despite some miners potentially underperforming compared to Bitcoin’s price, with low-cost miners such as CLSK and RIOT predicting. to surpass others. The post-halving period could also see significant growth for at least one listed miner.
The second half of 2024 could bring even more dramatic developments for Bitcoin. Against the backdrop of global political shifts and an increase in global voting participation, Bitcoin is expected to reach new heights. This period of increased political activity and potential changes in the regulatory landscape, especially following a key US presidential election, sets the stage for Bitcoin to potentially reach an all-time high. VanEck speculates that Bitcoin could reach a new peak in value by November 2024, potentially reaching $100,000 by the end of the year. This scenario, characterized by a deviation from certain regulatory positions, could lead to a milestone for Bitcoin and its perception in the global financial system.
The Flipping won’t happen, but DeFi will rise.
Ethereum will make significant progress, but will not surpass Bitcoin in market dominance. Ethereum’s performance is expected to outpace even the biggest tech stocks, but it won’t achieve the long-speculated “flippening” to overtake Bitcoin. Bitcoin’s clearer regulatory status and its appeal due to the energy-intensive mining process are expected to attract greater interest from state-backed entities in regions such as Latin America, the Middle East and Asia. Notably, Argentina could join the ranks of countries like El Salvador and the UAE in state-level Bitcoin mining support, with a focus on exploiting stranded methane and gas resources.
At the same time, Ethereum’s Layer 2 solutions are poised for substantial growth following the implementation of EIP-4844, which promises to improve scalability and reduce transaction costs. This upgrade is expected to catalyze a consolidation within the Ethereum network, with two to three Layer 2 chains emerging as dominant players. These leading chains could potentially surpass Ethereum in monthly decentralized exchange volume (DEX) and total value locked (TVL). This shift is likely due to lower transaction costs that allow for more efficient trading and arbitrage opportunities. By the fourth quarter of 2024, these Ethereum Layer 2 chains could collectively double Ethereum’s current DEX volume and increase transaction numbers exponentially, signaling a significant evolution in Ethereum’s ecosystem.
In total, VanEck made 15 predictions for crypto in 2024, listed below:
- Arrival of the US Recession and Debut of Spot Bitcoin ETFs
- Quiet fourth Bitcoin halving
- Bitcoin’s all-time high in Q4 2024
- Ethereum’s market position behind Bitcoin in 2024
- Dominance of ETH Layer 2s Post-EIP-4844
- NFT activity spikes to new heights
- Binance gives up top spot in spot trading
- Stablecoin market cap reaches record high with recovery of USDC market share
- Decentralized exchanges achieve record market share for spot trading
- Bitcoin yield opportunities powered by money transfers and smart contract platforms
- Rise of a Leading Blockchain Game
- Solana outperforms Ethereum with the resurgent DeFi TVL
- Meaningful adoption of DePin networks
- Corporate Crypto Holdings Boosted by New Accounting Standards
- DeFi’s reconciliation with KYC regulations
VanEck’s full report is available on the company’s website website.
