While overall, it has been a challenging year for investment markets across the globe, the last couple of years have been particularly difficult for the cryptocurrency sector, beset by many challenges. As we enter 2024, there are high hopes that the cryptocurrency market will improve with some very ambitious predictions!
Leading markets
The consensus is that the United States, China (including Hong Kong), Japan and South Korea are the leading cryptocurrency trading locations. It is fair to say that the UK is also making waves to a certain extent, but until the issue of regulation is resolved, it may well lag behind competitors.
A quick glance back at 2023 shows that the Hong Kong authorities have been highly proactive regarding cryptocurrencies and crypto assets, embracing blockchain and other leading technologies. Recently, we have seen a considerable shift in trading volumes from the US to the Far East, particularly Hong Kong, due to regulatory roadblocks outside the Far East. So, what does the future hold?
Bitcoin set to lead the way in 2024
It will come as no surprise to learn that Bitcoin is expected to lead the way in 2024, with the British Standard Chartered Bank suggesting that Bitcoin could hit $100,000 in 2024. In the calendar year, Bitcoin has been as low as $16,486 and as high as $44,726, currently standing just off the high at $42,549. The all-time high was just under $69,000, so an increase to $100,000 in 2024 would break new highs and create a return of around 150% on current levels. However, nothing is guaranteed in the world of crypto assets!
Why is Bitcoin expected to perform so well?
When you delve a little deeper, these “ambitious” targets for Bitcoin may seem a little more understanding.
US ETF
While nothing is ever signed, sealed, and delivered until announced by the regulators, it appears that we are on the verge of the first-ever US spot BTC ETF. This would bring cryptocurrencies, and in particular, Bitcoin, to the masses, releasing what could be a significant amount of pent-up demand.
Bitcoin halving
It is not common knowledge, but in 2024, the next Bitcoin "halving" event is expected to happen, which will reduce by 50% the rewards earned by Bitcoin miners. This is not the first such event, with rewards reduced by 50% in 2012 from 50 bitcoins down to 25, halved again in 2016 and 2020, with 2024 expected to be the next “event”.
Reducing the rewards will ensure that fewer new Bitcoins are released into the system in a similar fashion to the way in which the supply/demand ratio impacts scarce/precious metals.
Altcoins
In the world of cryptocurrencies, any currency not Bitcoin will be called an "altcoin". Several experts are predicting that other cryptocurrencies will enjoy a relatively strong 2024 because of increased demand, and, as history shows, they tend to be dragged along when Bitcoin performs relatively well.
Conclusion
There are potentially optimistic signs that the cryptocurrency market could enjoy an interesting 2024, but as we know, things can change relatively quickly. Looking at this from a practical point of view, the ongoing creation of a structured regulatory framework in Hong Kong will likely attract more traders and crypto/blockchain businesses. The introduction of the US spot BTC ETF should not be underestimated as a considerable influence, not only on liquidity but also on wider access and popularity of crypto assets.