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What to expect from cryptocurrencies and blockchain in 2024?
As the world rang in the new year, Bitcoin hit $45,000, a high last seen in the spring of 2022. While many may be tempted to call the end of a crypto winter or bear market, the geopolitical situation is highly unstable and existing price cycles are not set in stone.
While it is almost impossible, as well as irresponsible, to bet on prices or industry trends, the facts we already have available can help understand the type of headlines we might see in newspapers in 2024.
Sam Bankman-Fried’s ruling
The former CEO of failed cryptocurrency exchange FTX was convicted of all seven fraud-related charges in November 2023 and is expected to be sentenced in March this year. Sam Bankman-Fried could spend several years to the rest of his life in prison as his debtors and liquidators try to figure out how to recover their lost savings.
The court’s ruling will set a precedent, showing other cryptocurrency entrepreneurs the dangers of playing fast and loose in the face of U.S. financial regulations, even if they operate outside the United States
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Bitcoin price recovery
Bitcoin, the largest cryptocurrency by market capitalization, reached the $45,000 mark for the first time since 2022, finally triggering some optimism in the market. While financial influencers and others may push investors to enter the market at this point or buy cryptocurrencies more aggressively by targeting market recovery and the coin’s past highs that have surpassed $65,000 in 2021, investors should never trading with the intention of making a quick profit—unless they are experienced traders who have studied the underlying blockchain technology.
Coin crashes can happen in a matter of minutes, so as euphoria builds and traders fear missing out on opportunities, investors should be especially cautious and not get overwhelmed by peer pressure.
Cryptocurrency exchanges are monitored much more closely
Three or four years ago, the average Indian cryptocurrency trader could get away with making investments through foreign cryptocurrency exchanges and collecting their profits without paying taxes. However, regulators and legislators are tightening the screws every year. In light of the US government’s actions against Binance, the world’s largest cryptocurrency exchange, users can also expect the Indian administration to crack down on the exchange’s activities quite soon.
In fact, the The Financial Intelligence Unit India (FIU IND) late last year issued show-cause notices to Binance as well as foreign providers such as Kucoin, Huobi, Bitfinex and MEXC Global, claiming they were not operating legally. Indian users who have accounts with these exchanges or other crypto firms believed to have Chinese links will likely find it much more difficult to continue business as usual in 2024.
Bitcoin halving
People who help validate Bitcoin transactions with the help of complex code-solving equipment and energy-intensive hardware are rewarded for their efforts. While the current reward amount for this task is 6.25 BTC (about $275,512.5 as of early January), this sum halves approximately every four years in an event called the “Bitcoin halving.”
This means that over time it will become less profitable for people to mine Bitcoin and could affect how both individuals and mining companies invest in the asset. The next Bitcoin halving is expected to occur in the first half of this year, which could trigger more volatility in the market.
More and more countries are working on CBDCs
More than 100 countries, including India, are currently exploring the development or implementation of central bank digital currencies (CBDCs) for reasons ranging from easy cross-border transactions to offering residents a local alternative to cash and to credit cards. Unlike cryptocurrencies like Bitcoin and Dogecoin, CBDCs are strictly regulated by the country’s government and central bank and are not intended to be held as investments.
While many people, such as potential users of the European Union’s Digital Euro, are concerned about how CBDCs will affect their digital and financial privacy, IMF Managing Director Kristalina Georgieva urged countries last year press on the accelerator and move forward with their CBDCs to avoid being left behind.
Cryptocurrency crimes are on the rise in India
The flip side of increased cryptocurrency adoption is increased crypto crime, as scammers and hackers exploit people’s interest in new technology to come up with new ways to steal their money. Indian crypto regulations are still in their infancy as the government treats the industry with suspicion, making it easier for scammers to take advantage of Indian cryptocurrency traders who now have no safety net, and harder for victims to recover from such incidents or report them to the competent authorities.
Since sites like X (formerly Twitter) allow users to advertise cryptocurrency scams While high-risk companies advertise their services with the help of more traditional channels, not only cryptocurrency traders but also everyday Internet users will need to educate themselves on the basics of blockchain, to keep their funds safe. As cryptocurrency prices rise and assets become valuable, cybercriminals are more motivated to steal your life savings.
Cryptocurrencies meet artificial intelligence
The generative AI boom sparked by large language models (LLMs) like ChatGPT has touched nearly every industry imaginable, and cryptocurrencies are no exception. For better or worse, engineers and entrepreneurs are examining how AI tools could help predict market movements or even influence it.
Moving further away, however, the combination of blockchain and artificial intelligence could lead to the release of new Web3 products or the updating of existing services. (For example, the Brave browser provides AI-based summaries of search results similar to those of Google, although it rewards users with cryptocurrencies for viewing advertisements and supports cryptocurrency transactions.)
Expect to see more mergers like this and products that offer features you never thought you needed or wanted.
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