The Block Research
Compiled by: TechFlow
The Block research team has made predictions for the developments in 2024. The analyst team has made predictions about the new trends, narratives, and expectations for the coming year. This year’s predictions include their thoughts on how artificial intelligence will play a role in the crypto field, whether they believe Bitcoin ETFs will be approved, and more.
Common Predictions:
– Investors generally expect cryptocurrency prices to appreciate in 2024, driven by a risk-on environment.
– Bitcoin ETFs will be approved in the first quarter of 2024.
– Bullish narratives include RWA, DePin, and artificial intelligence.
– Coinbase’s strong performance will benefit institutional adoption of cryptocurrencies.
– The adoption rate of Ethereum-based Rollups will increase through the activation of proto-danksharding/EIP-4844.
Analyst Predictions:
George Calle
– The total market capitalization of the crypto market and mainstream coins (BTC, ETH, and SOL) will appreciate in the risk-on environment of 2024.
– Cryptocurrencies will outperform broader stock and tech industry indices.
– A cash-settled BTC ETF will be launched in early first quarter, but Bitcoin’s dominance will be shaken as investors turn to alternatives with greater upside potential.
Steven Zheng
– Modular and integrated approaches will finally come into play in 2024. Ethereum will launch proto-danksharding and kick off a wave of application layer Rollups with modular protocols like EigenLayer and Celestia. At least 20 “Ethereum alliances” with TVL reaching or exceeding $1 billion will be seen.
– Solana and Sei Network’s resurgence, along with the expected launch of Monad, will showcase the powerful capabilities of parallel processing/execution. The top 10 cryptocurrencies by market capitalization will include two major Layer 1 blockchains focused on parallelization.
Eden Au
– The approval of a spot BTC ETF will be a “sell the news” event, despite Bitcoin hitting all-time highs. ETH will outperform BTC in the spot ETF speculation. Coinbase will outperform BTC as it becomes the preferred custodian for multiple approved ETFs.
– The implementation of EIP-4844 will not have a significant short-term impact on L2 adoption. Arbitrum One and Optimism’s mainnet will remain popular L2 solutions. Application-specific L3s will be launched.
– DeFi will benefit from financial and technical innovations in 2023. The growth of liquidity collateral protocols will allow staking rewards to penetrate into a wider range of DeFi products, such as interest-bearing stablecoins, driving the industry’s “risk-free rate.” New yield optimization DeFi products will start delivering multi-chain and cross-chain strategies to users.
Brandon Kae
– The AI sub-sector of the crypto industry may be one of the best-performing sectors this year. Challenges with traditional models, such as centralization and regulatory hurdles, may drive interest in open-source, decentralized AI/ML development. The crypto industry allows market participants to invest in and speculate on AI-related opportunities that are unavailable in traditional markets, further fueling speculative narratives.
– At least one AI-related project will enter the top 10 by market capitalization by the end of this year, with many projects reaching valuations in the billions.
Abraham Eid
– With increasing interest in tokenization of securities in traditional finance, we will see a lot of acquisitions of crypto-native infrastructure platforms, enabling investment firms, banks, and financial market infrastructure participants to quickly consolidate their digital asset product portfolios. We will also see more major investment firms tokenizing ETFs and money market funds on-chain, similar to Franklin Templeton’s Benji Investments FOBXX fund.
– Web3 games will continue to struggle to find market-fit products despite more positive speculation fueled by exponential advancements in generating AI.
– The biggest product innovations in DeFi will come from new real-world asset tokenization platforms, expanding into existing major areas like private lending and US treasuries.
Carlos Guzman
– The theme of 2024 will be the revival of cryptocurrencies and digital assets. The bullish sentiment at the beginning of the year will be driven by the anticipation of Bitcoin ETF approval, which will ultimately happen in the first quarter. However, the approval itself will resemble a “sell the news” event with no sustained positive impact on Bitcoin prices in the short term. While ETF inflows will be substantial, the initial scale won’t be significant.
– The market capitalization of the entire crypto market will continue to be driven by macro and liquidity conditions, with everyone’s attention focused on the path of the US Federal Reserve. The initial crypto excitement in the first quarter may wane as a high-interest rate environment lags behind the impact on household and corporate debt, leading to broader economic slowdown. On the other hand, a weak macroeconomic indicator may prompt the Fed to signal a rate cut eventually, leading to a crypto rebound in the second half of the year.
– The excitement around Solana will fade in the early part of this year, and Bitcoin will dominate the market before the halving. However, post-halving, Bitcoin will lose its dominance in the face of broader alternative performance. ETH and L2 tokens will rebound with the support of EIP-4844, thanks to lower fees and a new narrative around ecosystem scalability. Alt-L1s will also rise as the market bets on comprehensive approaches to scaling smart contract platforms. Platforms like Aptos, Sui, Sei, Solana, Monad, and NEAR will be in focus.
– Privacy-focused smart contract platforms, combining the advantages of cryptography and AI, such as zero-knowledge machine learning, will receive significant speculation and venture capital but won’t reach the maturity level of widespread adoption.
This is the end of the translation.
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