Cryptocurrencies have been making waves in the global market, transforming the way we interact with money and financial systems. As we approach 2024, it’s time to examine the top 13 crypto trends that are expected to shape these years.
Moreover, based on extensive research and analysis, these trends will provide a roadmap for investors, developers, and enthusiasts in the crypto space.
13 best crypto trends in 2024
Exploring crypto trends in 2024 – Image via Freepik
Check out the top crypto trends in 2024 that have caused a stir within the cryptocurrency market. Look at the trends to make the right investment choices:
1. Bear market downturn
The cryptocurrency market has entered a prolonged bearish phase lasting several months. Although there have been some bullish movements at the beginning of 2023, most leading cryptocurrencies have later witnessed bearish downturns, resulting in substantial declines in their market values.
Furthermore, this ongoing bear market can be attributed to a constellation of factors, including macroeconomic uncertainties, the specter of rising interest rates, and geopolitical tensions.
Implications of the bear market
- Decreased trading volumes: Trading volumes have decreased as investors become more cautious, leading to lower liquidity in the market.
- Overall market pessimism: The bearish sentiment has led to a general sense of pessimism among investors, making it challenging for cryptocurrency prices to recover.
- Shakeout of weaker projects: The bear market could lead to the failure of weaker cryptocurrency projects and scams as investors become more discerning.
Also Read: How to Invest in CBDC in 4 Easy Steps (2024 Guide)
2. FTX collapse
The abrupt collapse of the FTX cryptocurrency exchange in November 2022 reverberated through the entire industry, casting a spotlight on the risks inherent in centralized exchanges. Furthermore, it has also ignited concerns surrounding regulatory oversight within the cryptocurrency ecosystem.
Implications of the FTX collapse
- Erosion of investor confidence: The collapse has eroded investor confidence in centralized exchanges, potentially leading to a shift towards decentralized alternatives.
- Calls for stronger regulation: Regulators are likely to increase scrutiny of cryptocurrency exchanges and implement stricter requirements for licensing and operations.
- Demand for greater transparency: Investors are demanding greater transparency from exchanges, including regular audits and clear communication about risks and safeguards.
Following FTX, companies like Genesis, Terraform Labs, Celsius Network, BlockFi, etc, also filed for bankruptcy. The lingering aftermath of this event continues to exert an influence on the market, prompting investors to scrutinize every move of the cryptocurrency market.
3. Rise of Layer 2 smart contracts
Layer 2 scaling solutions, which operate as overlays atop existing blockchain infrastructures like Ethereum, are gaining substantial traction. These solutions, including zero-knowledge and optimistic rollups, promise to resolve the industry’s persistent issues.
Here are some of the most prominent benefits of Layer 2 smart contracts. Take a look:
- Scalability: Layer 2 solutions enable faster and more efficient processing of smart contracts, addressing the congestion and high fees on the base blockchain.
- Lower transaction fees: By offloading transactions from the main chain, Layer 2 solutions significantly reduce transaction fees for users.
- Interoperability: Some Layer 2 solutions aim to bridge different blockchains, enabling seamless communication and asset transfer across multiple networks.
4. Cryptocurrency’s environmental impact grows
The energy-intensive nature of cryptocurrency mining, particularly evident in proof-of-work blockchains like Bitcoin, has catalyzed growing concerns regarding its environmental footprint.
As the cryptocurrency sector continues to expand, the industry’s energy consumption and carbon emissions have garnered heightened attention. Consequently, there has been a surge in calls for the adoption of more eco-friendly mining practices and the widespread implementation of proof-of-stake consensus mechanisms. All these factors come together to make this a rising crypto trend in 2024.
5. Central Bank Digital Currencies (CBDCs) gain momentum
CBDCs are digital versions of national currencies issued and controlled by central banks. They are gaining traction worldwide as governments explore their potential to enhance financial inclusion, efficiency, and control over monetary policy.
Take a look at the most prominent key advantages of CBDCs:
- Financial inclusion: CBDCs can reach unbanked and underbanked populations, enabling them to participate in the digital economy.
- Efficiency: CBDCs can streamline cross-border payments and reduce transaction costs, improving financial system efficiency.
- Monetary policy control: CBDCs provide central banks with greater control over monetary policy and the ability to implement targeted interventions.
Several nations, including China, Sweden, and the Bahamas, have already initiated pilot CBDC programs, while others are actively researching and developing their own digital currency solutions.
Also Read: How Will CBDC Affect Banks? Everything You Need to Know
The key aspects of crypto trends in 2024
6. Play-to-Earn (P2E) gaming revolutionizes the industry
P2E gaming has emerged as a groundbreaking trend that is reshaping the gaming landscape. In P2E games, players have the opportunity to earn cryptocurrency rewards for their in-game achievements and participation. This innovative approach enables gamers, especially in developing regions, to monetize their gaming endeavors and generate income.
Check out some of the most prominent examples of P2E gaming:
- Axie Infinity: A Pokémon-inspired game where players collect, breed, and battle digital creatures called Axies.
- The Sandbox: A virtual world where players can create, own, and monetize their virtual experiences and assets.
- Gods Unchained: A trading card game where players own their cards as non-fungible tokens (NFTs) and can trade or sell them freely.
7. Ethereum 2.0 realizing its potential
Ethereum 2.0, a significant upgrade to the Ethereum blockchain, is progressively transitioning from the energy-intensive proof-of-work to the more sustainable proof-of-stake (PoS) consensus mechanism.
This transition is expected to alleviate scalability concerns, reduce transaction fees, and enhance the overall efficiency of the Ethereum network. As Ethereum 2.0 continues to evolve, it is poised to unlock new horizons for decentralized applications (dApps). Additionally, it will also solidify Ethereum’s position as a leading blockchain platform.
8. Cryptocurrency’s role in geopolitical conflicts
Cryptocurrency is increasingly being leveraged as a tool in geopolitical conflicts and warfare. Governments are exploring the use of cryptocurrencies for various purposes, making this a prominent crypto trend in 2024.
We have mentioned a few ways in which crypto is being used as a warfare tool globally. Take a look:
- Sanctions evasion: Countries facing economic sanctions often turn to cryptocurrency to circumvent restrictions and access funds.
- Covert operations: Intelligence agencies often use cryptocurrency to fund covert operations or support proxy groups.
- Financial influence: Governments also use cryptocurrency holdings to manipulate markets or exert pressure on other countries.
The ongoing Russia-Ukraine conflict has notably highlighted the potential of cryptocurrencies to play a significant role in contemporary warfare and diplomacy.
9. Cryptocurrency exchange-traded fund (ETF) applications
BlackRock filed for a spot Bitcoin ETF on June 2023, and several cryptocurrencies have followed the way. Cryptocurrency ETFs will provide investors with a regulated and user-friendly pathway to gain exposure to digital assets. Furthermore, this eliminates the need for direct asset management.
As of October 2023, it has been revealed that the first Bitcoin ETF may receive its approval within early 2024. This has opened up potential new avenues for institutional and retail investors to participate in the cryptocurrency market, ushering in a new era of accessibility and legitimacy.
10. Bitcoin halving
Bitcoin halving is a pivotal event in the Bitcoin ecosystem that occurs approximately every four years. It involves a reduction in the block reward for mining new bitcoins by half. Moreover, this event has historically had a significant impact on Bitcoin’s price and its overall market dynamics.
Halving reduces the profitability of mining, as miners receive fewer bitcoins for their efforts. Furthermore, this can decrease mining activity, potentially affecting the network’s security and transaction processing speed.
The next Bitcoin halving is expected to occur in 2024. Additionally, many analysts believe it could lead to another bull market for Bitcoin, as reduced supply and increased demand could drive up the price. However, the overall impact will depend on various factors, including market sentiment, adoption rates, and regulatory developments.
Also Read: When is the Next Bitcoin Halving and What History Teaches Us
Understanding Bitcoin halving
11. Web 3.0 becomes a mainstream phenomenon
Web 3.0, the concept of a decentralized internet built on blockchain technology, is gaining momentum as a potential successor to the current Web 2.0 paradigm. Additionally, it promises to transform the internet by giving users more control over their data, creating a more equitable and transparent online experience.
Here are a few noteworthy features of Web 3.0:
- Decentralization: Web 3.0 applications and platforms are not controlled by centralized entities but rather governed by distributed networks of users.
- Data ownership: Users have ownership and control over their data, enabling them to decide how it is used and monetized.
- Transparency: Transactions and interactions on Web 3.0 are transparent and verifiable, reducing the risk of manipulation and censorship.
12. Global crypto regulation
Governments worldwide are increasingly focusing on regulating cryptocurrencies to address concerns related to consumer protection, financial stability, and illicit activities.
Regulatory approaches
- Protective measures: Some countries have implemented regulations to protect consumers from fraud, scams, and market manipulation.
- Anti-Money Laundering (AML) and Know Your Customer (KYC): Additionally, regulations are being implemented to prevent the use of cryptocurrencies for money laundering and illicit activities.
- Taxation: Governments are also developing frameworks for taxing cryptocurrency transactions and gains.
Furthermore, the development of clear and consistent regulatory frameworks is crucial for the long-term stability and adoption of cryptocurrencies. While some regulations may initially appear restrictive, they can provide legitimacy and foster a more secure environment for investors and users.
13. Retail adoption of cryptocurrencies
Retail adoption of crypto is a growing trend in 2024. Additionally, it is driven by increased awareness, user-friendly platforms, and the potential for high returns.
Some of the most prominent factors enabling retail crypto adoption are as follows:
- Increased awareness: Cryptocurrency has gained significant mainstream attention, increasing retail investors’ awareness.
- Ease of access: Cryptocurrency exchanges and trading platforms have become more user-friendly and accessible. Additionally, this is lowering the barrier to entry for new investors.
- Potential for high returns: The volatile nature of the market and the possibility of significant gains have attracted individuals seeking alternative investment opportunities.
As the cryptocurrency ecosystem matures, it is likely to attract even more retail investors seeking diversification, potential returns, and participation in the evolving digital economy.
Also Read: What is CBDC and How Does It Work? A Comprehensive Guide
Unraveling the future of cryptocurrency
Wrapping up
In conclusion, the crypto trends for 2024 promise to be both challenging and exciting. From the implications of the bear market to the growing popularity of crypto in retail, from the increasing scrutiny of regulators to the environmental impact of crypto mining, each of these trends is set to shape the future of the crypto world. Finally, staying informed, adaptable, and ready for what comes next will be crucial as we move forward.
