Navigating tomorrow: What 2024 may hold for crypto

As we reflect on the year that was, it also gives us some valuable insights into what the next year may have in store for crypto. It’s promising to be a big one, even by crypto standards. There’s an effervescent quality to the current anticipation around the Bitcoin ETF applications, and the fourth Bitcoin Halving is happening in April. There’s also the US elections, and other non-trivial developments in the tokenisation space. 

Here are the top things we’re looking out for next year. 

Bitcoin Halving 

Roughly every four years, bitcoin rewards paid to miners are cut in half as a way to avoid flooding the market and causing rapid inflation. These events are known as Bitcoin Halvings, and each event has historically been credited by analysts as having had a major impact on the price as they decrease the supply of new bitcoin into the market. 

The next halving event is expected to happen in April 2024. This will see the number of bitcoin rewards earned per block approved fall from 6.25 to 3.125.

What’s happened previously? The first halving was followed in the ensuing months by the price of bitcoin increasing more than 8,000% on pre-halving levels. The price of bitcoin also increased roughly 3,000% after the second halving in 2016. The last halving in 2020 was followed by a bull run that ended in an all-time high price of almost $69,000. 

So? While price history is not an indication of future price movements, the Bitcoin Halving is one of the events on the crypto calendar that investors follow very closely. 

US elections

The outcome of the US election in November 2024 could have profound implications for the crypto industry.

US regulatory and financial decisions tend to have a marked impact on the global crypto industry, as we’ve seen with the Bitcoin spot-ETF applications. But there’s also an interesting development of government officials playing into crypto for voter support. 

“A number of senators and congresspeople, even outsider presidential candidates, are avowed crypto supporters,” says James Ovenden, Head of Product Marketing at Luno. “Crypto started to enter the conversation, albeit in a small way, in the last election.The amount of talk has grown since, and it could herald a more positive approach to crypto than we’ve seen in recent years,” he says.

So? A crypto-friendly administration might foster regulatory frameworks, encouraging innovation while providing clarity and legitimacy to the industry. 

Africa x Crypto 

Chainalysis pointed out that crypto investment in sub-Saharan Africa tends to be more retail driven than other regions, possibly a sign that crypto has become an important part of people’s daily lives, according to the research firm. “No country exemplifies this better than Nigeria, which ranks second overall on our Global Crypto Adoption Index and also leads the region in raw transaction volume,” Chainalysis notes. 

“Nigerians are increasingly turning to, and embracing cryptocurrencies for storing and transferring value, gaining access to international markets,” says Owen Odia, Country Manager for Nigeria at Luno. “More recently, it’s also been used as a means of overcoming challenges in accessing Dollars and hedging against Naira volatility,” she says. 

The anticipated uptick in crypto adoption could be driven by heightened institutional interest, ongoing regulatory discussions, technological progress, the proliferation of diverse use cases such as DeFi, and global economic uncertainties, Odia explains. 

So? This could spell a continuing shift of crypto use and adoption to Africa and other developing nations where crypto is also used for its utility along with it being seen as an investment. 

Bitcoin ETFs 

If the Security and Exchange Commission (SEC) approves any of the Bitcoin spot-exchange traded funds early in January, it could lead to an influx of institutional investment into bitcoin. “In 2017, we had initial coin offerings (ICOs). In 2020, we had NFTs. The next bull run will also likely have ‘a thing’, a lightning rod for its popularity,” says Ovenden. “It’s probably assumed at the moment that this is the spot-ETF,” he says. 

So? A Bitcoin ETF could open the way for institutional investors to invest in Bitcoin through a recognised traditional financial institution.  

AI is coming, for everything

“Given the hype around AI in 2023 and the obvious benefits of automated trust for transacting in an automated ecosystem, AI could be particularly interesting,” says Ovenden. 

AI development is not looking like it’s slowing down anytime soon, with experts calling last year’s breakthroughs among the most significant in human history. It seems like the technology will leave no industry unturned, including crypto. 

So? From AI-driven chatbots to automated trading bots, the technology seems a natural fit for programmable money, also known as crypto. 

Tokenise it all 

When juggernauts like JP Morgan create their own blockchain and start trading tokenised assets on it, it’s time to start paying attention. Last year saw several blockchain use cases play out in the financial space, most notably tokenisation, wherein an asset is turned into a crypto token and immortalised on a blockchain. This could be in the form of a house, a fraction of a house, music royalties, gold, bonds, stocks, and so on, and so on. 

Tokenisation looks like it will grow next year as banks and asset managers continue to search for the holy grail of almost-instant transfers and transactions of assets. 

So? Tokenisation could also open up unique investment opportunities for investors who previously didn’t have access to property investment or investing in music royalties. 

*This information should not be construed as a solicitation to trade. All opinions, news, research, analysis, prices or other information is provided as general market commentary for information purposes only and is not investment advice or recommendation. Luno always advises you to obtain your own independent financial advice before investing or trading in cryptocurrency.