The New Year is upon us, which means plenty of news stories looking back at blockchain events in 2023, such as this one (From NFTs to XRP: the biggest crypto stories of 2023 (Axios)), this one (The Year that Cryptocurrency Somehow Didn’t Die (The Ringer)), and this one (The year in data: 5 charts that show how crypto changed in 2023 (The Block)).
2023 certainly brought us plenty to write about: SBF taking it on the chin in his trial, Binance taking it on the chin for violating AML laws and a slew of regulations (actually, the $4 billion settlement is more like a haymaker), the SEC taking it on the chin in the Ripple/XRP and GBTC matters, crypto banking being knocked to its knees with Silvergate Bank and Signature Bank closures, the emergence of bitcoin ordinals, the CEOs of JPMorgan, BofA, Citi and Goldman Sachs testifying about the dangers of blockchain before the Senate Banking Committee notwithstanding the fact that their companies are busy building out blockchain infrastructures, and cryptocurrencies once again performing better than most other assets (which of course also means stupid money is back in the game).1
But today is not about looking back to the past, it is about looking forward to the future. So here are some predictions for 2024 based on a combination of educated and uneducated guesses and some gut feelings:
- Bitcoin ETFs will be approved by the SEC. This is really not big news anymore; at this point, it is more a question of how many BTC spot ETFs will be approved in the first wave.
- The emergence of BTC ETFs and the upcoming halving will bring a significant rise in the price of BTC. Again, this is not necessarily big news. What is interesting is how much the inventory held by bitcoin miners hitting the market and speculators “selling the news” will affect the market by drastically increasing BTC supply.
- ETH ETFs will be approved by the SEC as well. A number of filings have already been submitted, and generally the preconditions for BTC spot ETFs (such as a futures market) are in place for ETH.
- More projects will use alternates to Ethereum. Ethereum is still king, but it may start to collapse under its own weight (i.e., the price of gas fees as a result of use and an increase in the value of ETH). Layer 1 alternatives to Ethereum such as Solana, Cardano and Polkadot may catchup rapidly in 2024.
- Congress will pass stablecoin regulation. Even though Rep. McHenry is a bit of a lame duck since his announcement that he will retire, he is still the Chairman of the House Financial Services Committee and much respected by both sides of the aisle. It is thought that passing stablecoin legislation is very important to him, and it may be high on his “must pass before I leave Congress” list.
- Congress may pass some form of digital asset money laundering bill. A number of AML bills focusing on digital assets have been introduced in Congress, and there is broad support for AML legislation in general. In a different environment, there would be little doubt that an AML bill focusing on digital assets would be passed, but given the difficult subject matter (one current proposal would require validator nodes to be subject to AML obligations), the potential for bad blood resulting from the upcoming budget discussions in January and February, and the fact that 2024 is an election year may doom all possible legislation that comes up after the budget for the remainder of this Congress.
- The SEC will win its case against Coinbase but it will be a pyrrhic victory. The SEC will be able to prove that at least one token listed on the exchange was a security, a token or a few will be delisted, and the market will shrug and move on.
- Bitcoin reaches $1,000,000 and I retire. This may be more wishful thinking than anything else but if it does happen, I leave the S&K Blockchain and Cryptocurrency Group in excellent hands.
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1 Based on data from the Economic Times, BONK returned 9,600%, Injective 2,923%, Tellor Tributes 2,200%, Kaspa 2,198%, and “Marinade Staked SOL” 1,083%. If you already knew what the use case for any of these tokens was before you read this article, please send me an email so I can send you a prize.