By the end of 2023, the cryptomarket will have recovered from failed ventures and fraud. It will be embracing real progress towards mainstream adoption. Bitcoin regains its position as a store of value when global tensions increase and regional banks fail.

TradFi giants are filing for Bitcoin ETFs, and tokenizing Real World Assets (RWAs). This convergence is evident in the TradFi giants’ application to launch Bitcoin spot ETFs. The year 2024 will be a turning point in the evolution of crypto, as it is now 15 years old.

The recent rise in Bitcoin prices is a precursor to the anticipated bull market that will occur in 2024. Other factors are also aligned to create the conditions for a crypto revival.

Subscribe to our weekly newsletter Crypto Long & Short for insights, news, and analysis aimed at professional investors.

Macro-Factors : Global liquidity levels have been improving since October 2023. The Fed’s shift in tone at the December FOMC meeting confirmed market expectations of possible rate cuts early in 2024. This created more favorable conditions for risky investments.

Mainstream adoption: The introduction of spot ETFs and tokenization (expected as soon as January) represents a pivotal point in the integration of crypto into broader financial landscape. A small allocation of US wealth assets to Bitcoin ETFs can result in significant ETF sizes. DeFi protocols diversify their yield sources to include RWAs such as U.S. Treasuries in order to attract more crypto-native funds.

Technological Developments: Major improvements in blockchain scalability, UI/UX design and UI/UX implementation are removing barriers to the transition from Web2 into Web3. Web3 apps that offer the same ease of use as Web2 coupled with the benefits of self-sovereignty will be a natural choice for users.

Crypto is it heading for mass adoption or experiencing irrational euphoria? Three plausible scenarios for 2024 emerge:

Cambrian explosion BTC may surpass its highest level (above $69,000 in January 2024), with certain sectors experiencing price movements reminiscent of DeFi’s summer 2021.

Stable Growth BTC could follow a similar pattern to 2023 with rallies of 20-50% driven by positive news, and sideways movements intermittent, culminating in a return of 50-100%.

Reset and Rebuild : Market corrections are possible, bringing BTC prices down to below $30,000.

The first two scenarios seem more probable, supported by macro-tailwinds, mainstream acceptance and technological advancements. Long-term BTC investors continue to accumulate and stablecoins supply has recovered, which indicates that external capital could flow into crypto.

In the future, it is possible that past winners of cycles will not be leading this time. Successful projects are often characterized by a vibrant community of users and developers, as in the following exciting themes:

Solana Renaissance Solana has experienced a renaissance, riding high in the shadow of FTX. It has attracted developers and users to its high-performance Blockchain. Solana’s Dex trading volume has almost ten-folded this year, a mini-DeFi Summer.

DeFi v2.0: DeFi is ripe for innovations despite being a mature crypto sector. Derivative DEXs with faster settlement times and cheaper costs could challenge CEX’s dominance in this field. Tokenized assets, re-staking and tokenized assets could make DeFi yields attractive again when compared with US Treasuries.

Web3 Games: Previous VC investments are about to pay off. Platforms such as IMX have a growing network effect and provide the resources and technology for a thriving Web3 community.

2024 will be a thrilling time for cryptocurrency investors and builders.

Benjamin Schiller is the editor.