Global investment management firm VanEck‘s 2024 predictions for crypto suggest a transformative year ahead for the sector, highlighting pivotal events and trends set to redefine the digital asset landscape from economic fluctuations to groundbreaking technological advancements.
The forecasts are based on analysis beyond just the crypto sector, looking at economic trends, technological developments, and regulatory dynamics. From the anticipated U.S. recession’s intertwining with the launch of spot Bitcoin ETFs, aiming to bolster Bitcoin’s resilience above $30,000, to the fourth Bitcoin halving poised to elevate its market value, these predictions spotlight pivotal moments in crypto’s journey.
Further, VanEck’s outlook predicts Ethereum to retain its position beneath Bitcoin’s market dominance while simultaneously outshining major tech stocks and facing competition from other smart contract platforms. The NFT market, which will be fueled by both Ethereum and Bitcoin in 2024, is expected to scale new heights, reshaping the landscape of digital collectibles. Meanwhile, the stablecoin realm, particularly with USDC, anticipates unprecedented growth.
The predictions also highlight the potential shift in exchange supremacy, with Binance’s leading spot trading position challenged by emergent rivals. Additionally, DEXs are projected to claim a significant slice of the spot trading market. A breakthrough is anticipated for blockchain-based gaming, with a game surpassing one million daily active users, marking a milestone in mainstream acceptance.
Robbie Ferguson, Co-Founder and President of Immutable, told CryptoSlate,
“Recognition from VanEck, one of the world’s top 10 ETF issuers, is exceptional validation of the work we’ve been doing for web3 games since we built the first decentralized game on any blockchain in 2017[…] This endorsement further validates our platform strategy, and relentless focus on an exceptional end player experience.”
Furthermore, Solana’s ascent to a top-three blockchain position, along with the rise of DePi networks like Hivemapper and Helium, anticipates broad diversification within the blockchain ecosystem.
Finally, a pivotal area highlighted by VanEck is the integration of Know Your Customer (KYC) protocols in decentralized finance (DeFi), 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 spot Bitcoin ETF will be approved in Q1.
In 2024, VanEck predicts the U.S. economy to enter a recession amidst slowing economic momentum and cooling inflation. This downturn, marked by 19 months of consecutive decline in leading indicators, weak commodity markets, and increasing corporate bankruptcies, sets a challenging backdrop. Yet, in this economic landscape, the debut of the first U.S. spot Bitcoin ETFs will be approved in Q1.
VanEck forecasts that these ETFs will attract substantial investment, drawing a parallel with the early success of the SPDR Gold Shares (GLD) ETF launched in 2004. The GLD ETF experienced rapid inflows, capturing a notable fraction of the gold market within its first quarter. Applying these metrics to Bitcoin, adjusted for the current era’s higher money supply, the prediction is a striking initial influx of around $1B, potentially reaching $2.4B within a quarter for Bitcoin ETFs.
This significant capital flow into Bitcoin ETFs reflects a deeper shift in the financial landscape. With the U.S. Federal Reserve’s M2 money supply considerably higher than during the GLD launch, the potential for Bitcoin ETF inflows is magnified, leading to an estimated $40.4B over the first two years. This surge is partly driven by a predicted preference for Bitcoin as a form of ‘hard money’ amidst concerns over sovereign debt levels and inflation, positioning it as an alternative to gold among investors.
Furthermore, the expected lower transaction costs of these ETFs, compared to current retail trading fees, suggest a potential for broader market adoption. Such cost efficiencies historically have catalyzed the widespread acceptance of new technologies and could similarly propel Bitcoin ETFs into the financial mainstream. Despite the looming recession and potential market volatility, these developments indicate a robust demand for Bitcoin, potentially sustaining its price above $30k in the early phase of 2024.
Impact of the Bitcoin halving and new Bitcoin ATH.
VanEck predicts that the fourth Bitcoin halving event, scheduled for April, will unfold smoothly without major disruptions. This halving is likely to lead to the disconnection of unprofitable miners, shifting the landscape towards those with more efficient, low-cost power solutions. Despite the initial adjustment period, where the market might experience some consolidation, Bitcoin’s value is projected to rise. VanEck predicts that following the halving, Bitcoin’s price could surpass the $48k mark, aligning with the technical pattern observed in April 2022. This uptrend is expected despite some miners potentially underperforming compared to Bitcoin’s price, with low-cost miners like CLSK and RIOT predicted to outshine others. The post-halving period might also see significant growth for at least one publicly traded miner.
The second half of 2024 could bring even more dramatic developments for Bitcoin. Amid a backdrop of global political shifts and an increase in global voting participation, Bitcoin is anticipated to scale new heights. This period of heightened political activity and potential changes in regulatory landscapes, particularly following a significant U.S. presidential election, sets the stage for Bitcoin to potentially achieve an all-time high. VanEck speculates that by Nov. 2024, Bitcoin could hit a new peak in value, potentially reaching $100k by the year’s end. This scenario, marked by a departure from certain regulatory stances, could lead to a landmark moment for Bitcoin and its perception in the global financial system.
The Flippening won’t happen, but DeFi will rise.
Ethereum is set to make significant strides but will not surpass Bitcoin in market dominance. Ethereum’s performance is expected to outshine even the largest tech stocks, but it will not achieve the long-speculated “flippening” to overtake Bitcoin. Bitcoin’s clearer regulatory status and its appeal due to its energy-intensive mining process are anticipated to draw increased interest from state-backed entities in regions such as Latin America, the Middle East, and Asia. Notably, Argentina might join the ranks of countries like El Salvador and the UAE in state-level Bitcoin mining support, focusing on utilizing stranded methane and gas resources.
Simultaneously, Ethereum’s Layer 2 solutions are poised for substantial growth following the implementation of EIP-4844, which promises to enhance scalability and reduce transaction fees. 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 (DEX) volume and total value locked (TVL). This shift is likely due to the reduced transaction costs enabling more efficient trading and arbitrage opportunities. By the fourth quarter of 2024, these Ethereum Layer 2 chains collectively might double Ethereum’s current DEX volume and exponentially increase transaction numbers, signaling a significant evolution in Ethereum’s ecosystem.
In total, VanEck made 15 predictions for crypto in 2024, listed below:
- U.S. Recession Arrival and Debut of Spot Bitcoin ETFs
- Uneventful Fourth Bitcoin Halving
- Bitcoin’s All-Time High in Q4 of 2024
- Ethereum’s Market Position Behind Bitcoin in 2024
- Dominance of ETH Layer 2s Post-EIP-4844
- NFT Activity Peaks to New Heights
- Binance Relinquishes Top Position in Spot Trading
- Stablecoin Market Cap Hits Record High with USDC Market Share Recovery
- Decentralized Exchanges Attain Record Spot Trading Market Share
- Bitcoin Yield Opportunities Driven by Remittances and Smart Contract Platforms
- Emergence of a Leading Blockchain Game
- Solana Outperforms Ethereum with Resurging DeFi TVL
- Meaningful Adoption of DePin Networks
- Corporate Crypto Holdings Boosted by New Accounting Standards
- DeFi’s Reconciliation with KYC Regulations
The full report from VanEck is available on the firm’s website.
13.15 GMT: Updated to include comment from Immutable.
