Bitget Managing Director Gracy Chen: 6 Crypto Events to Watch in 2024
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Bitget Managing Director Gracy Chen: 6 Crypto Events to Watch in 2024
The bull market has already arrived, and these 6 major events will catalyze new investment opportunities.
Navigating Web3 tides with focused insightsAuthor: Gracy Chen, Managing Director at Bitget
Translation: Luffy, Foresight News
We've endured a long bear market. It's been like surviving a harsh winter, always needing to keep hats and gloves ready. You might often ask yourself: "When will the clouds finally part?" But right now, my mindset has shifted. This isn't just about anticipating an upcoming bull run—I've already taken off my jacket and put on a T-shirt. I believe the bull market is already here.
2023 has been an exciting year for the crypto industry. As of December 5, the total market capitalization of cryptocurrencies surged nearly 93% from $794 billion on January 1, 2023, to $1.53 trillion. With 2023 coming to a close, it’s time to look ahead and focus on what’s next. In this article, I summarize the most anticipated major events in the crypto space for 2024.
In 2024, I believe six distinct catalysts will emerge as areas of interest for market participants, creating new investment opportunities.
Approval of Spot Bitcoin ETFs in the U.S.
In October 2021, the U.S. Securities and Exchange Commission (SEC) approved the first bitcoin-based ETF (exchange-traded fund) in the United States. However, the financial regulator has yet to approve a spot bitcoin ETF, a situation I expect to change soon.
On November 30, SEC officials met with representatives from Grayscale, the prominent crypto asset management firm that has been seeking to convert its existing Grayscale Bitcoin Trust into an ETF. The company won a key court ruling against the SEC in August, legally compelling the agency to review its bitcoin ETF application.
Just one day earlier, the financial regulator held formal discussions with BlackRock and Nasdaq regarding ETF matters. BlackRock filed its spot bitcoin ETF application with the SEC in June and submitted a spot Ethereum ETF application in November. Beyond these developments, James Seyffart, ETF analyst at Bloomberg Intelligence, stated he believes there is approximately a 90% chance of approval for a bitcoin ETF in early 2024. Analysts estimate the approval date could fall between January 8 and January 10.
Market sentiment remains optimistic, with a U.S.-based spot bitcoin ETF expected to play a significant role in helping institutions diversify their portfolios through bitcoin investments.
Ethereum's Dencun Upgrade
Major upgrades to the Ethereum network are typically among the most important events each year. The Dencun upgrade is expected to take place in the first quarter of 2024, introducing the long-awaited proto-danksharding.
Proto-danksharding is a prototype version of danksharding, a scalability technology under development for Ethereum. Due to Ethereum’s limited scalability, transactions can become slow and expensive during peak times. Developers plan to use sharding to split the network into smaller segments that can independently execute smart contracts and process transactions.
After the Dencun upgrade, rollup-based Layer 2 networks such as Arbitrum One, Optimism, and Base will be able to post data more cheaply to the Ethereum mainnet via blobs—data that can be attached to blocks but remain inaccessible to the Ethereum Virtual Machine. By using blobs and blob-carrying transactions, Layer 2s can store and retrieve off-chain data on Ethereum in a cost-effective way, making Layer 2 transactions significantly cheaper post-upgrade.
The Dencun upgrade will also bring additional benefits to Ethereum users, including optimized block space usage, reduced data storage costs, improved cross-chain communication, and enhanced security features through the reduction of the SELF-DESTRUCT opcode.
U.S. Interest Rate Hikes Come to an End
Since early 2022, the Federal Reserve has steadily raised the federal funds rate through the third quarter of 2023 to combat inflation in the United States. From January 2022 to August 2023, the effective rate increased from 0.08% to the current target range of 5.25%–5.5%.
With U.S. inflation falling from a peak of 9.1% in June 2022 to 3.2% in October 2023, I believe the Fed’s rate-hiking cycle is nearing its end. Markets anticipate the first rate cut could occur as early as May 2024. This shift is expected to strengthen positive sentiment in the crypto market, enhancing the appeal of bitcoin and other crypto assets.
Why does this matter? If we view financial markets as a series of interconnected pools, the U.S. money and bond markets represent the largest pool at the top.
Currently, high interest rates have filled this pool with abundant liquidity. However, once rates decline, this liquidity will begin flowing into smaller pools such as equities and cryptocurrencies. As bond yields drop, their attractiveness diminishes, prompting investors to seek higher-risk, higher-return assets like cryptocurrencies.
Circle IPO
Circle is the issuer of the U.S. dollar-pegged stablecoin USDC. According to a report in November 2023, Circle is preparing for an initial public offering (IPO) in early 2024, aiming to go public. This would make Circle the first publicly listed stablecoin issuer, a move expected to accelerate adoption of crypto-based stablecoins.
This wouldn’t be Circle’s first attempt at going public. A year ago, it terminated its merger agreement with special purpose acquisition company (SPAC) Concord Acquisition Corp., reportedly due to lack of SEC approval.
Bitcoin Halving
Like Ethereum’s major upgrades, the Bitcoin halving is one of the most significant events in the crypto industry for 2024. However, unlike Ethereum upgrades, the Bitcoin halving occurs roughly every four years.
The halving will reduce by 50% the amount of new bitcoins miners receive for each newly mined block. By cutting the issuance of new tokens in half, Bitcoin becomes scarcer and its inflation rate declines.
With stronger supply-demand dynamics, I expect Bitcoin’s price to surge following the halving. In fact, all previous halvings have been followed by bull markets in cryptocurrency.
Resolution of the FTX Case
FTX founder Sam Bankman-Fried was convicted in November on multiple counts of fraud involving billions of dollars. As part of the resolution process, the court has approved the liquidation of nearly $880 million in assets to repay creditors. These developments indicate FTX is gradually entering a restructuring phase. Resolving this case is expected to restore some investor confidence and provide greater regulatory clarity, potentially attracting new retail capital into the industry. SEC Chair Gary Gensler indicated he is open to considering a revival of FTX, provided new leadership replaces SBF and the exchange operates within legal boundaries. If approved by regulators, such a relaunch could help rebuild trust in FTX or at least mitigate the negative impact of the scandal.
The Path to the Next Crypto Bull Market
With the likely approval of spot Bitcoin ETFs in the U.S., the Ethereum Dencun upgrade, and other key catalysts on the horizon, we are poised to witness a Bitcoin supercycle in 2024. However, potential downside risks may also emerge next year.
For example, the now-defunct Mt. Gox exchange is expected to begin repaying creditors with 137,000 BTC, while the U.S. government plans to liquidate Bitcoin seized in the Silk Road case. These events could trigger sell-side pressure and lead to declines in crypto prices. Additionally, the global regulatory environment for cryptocurrencies remains uncertain, leaving room for unforeseen disruptions.
On the other hand, I believe the liquidation of Bitcoin from the Mt. Gox case and the U.S. government’s Silk Road holdings could mark the true beginning of a bull market. This could coincide with broader crypto adoption and waves of innovation. Regardless of how things unfold, it's essential to do your own research (DYOR) and prepare for a potentially epic crypto bull run.
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