bitcoin outlook: Bitcoin Outlook 2024: What are the emerging themes to watch out for?

As the investment universe gets ready to bid adieu, all signs point to the popularity and acceptance of cryptocurrencies getting bigger and better in 2024. As we step into 2024, the landscape of the cryptocurrency market continues to evolve, and Bitcoin, the pioneering digital currency, remains at the forefront. Bitcoin’s journey has been marked by both triumphs and challenges, and the year 2024 promises to bring about new trends and emerging themes that will shape the future of this decentralized digital asset. Before we get excited or curious about what 2024 is about to bring us, let us remember that studies and trends have showing an explosion of trends in cryptocurrency that investors can try to participate in. However, for the sake of this article, let us try to explore a handful of these themes that we can look forward to in the New Year.

Despite the well-documented challenges faced by Bitcoin and other cryptocurrencies in recent years, there has been a notable uptick of institutional interest in Bitcoin. All signs point to this intensifying in 2024, with more traditional financial institutions and corporations exploring ways to integrate Bitcoin into their portfolios. As regulatory clarity improves, it will only serve to strengthen Bitcoin’s reputation as a store of value with institutions looking at using it increasingly as a hedge against inflation and economic uncertainty.

Another challenge that Bitcoin has been dealing with for a few decades is that of Scalability, leading to slow transaction processing times and higher fees during periods of high demand. In 2024, seeing the rise in fees, adoptability of layer 2 solutions such as the Lightning Network would see an increase. Lightning significantly enhances Bitcoin’s transaction throughput. This would make microtransactions more feasible and contribute to a more efficient and scalable network.

Consumption of energy by cryptocurrencies expended during mining of crypto has been a hot topic of debate and has been concerning environmentalists and environment-conscious folks for years. While there is no telling with absolute certainty if this problem is one that will be solved or not. However, in 2024, the industry is likely to witness increased efforts to address the environmental impact of Bitcoin mining, data storage, etc. Innovations in sustainable mining practices, the use of renewable energy sources, and the development of eco-friendly consensus algorithms may emerge as key themes, aligning Bitcoin with broader environmental goals.

The fast-growing technology that is soon if not already challenging the existing centralized monetary system, Decentralized Finance (DeFi) has gained tremendous momentum in the cryptocurrency space. Come 2024, and it is expected that Bitcoin will expect to be more widely accepted to play a more active role in this ecosystem. Projects exploring the integration of Bitcoin with DeFi applications could open up new avenues for lending, borrowing, and trading, allowing users to leverage Bitcoin in a decentralized financial landscape. 2024 will also more than likely see the connection of more TradFi and DeFi bridges and gateways which will bring about a constant flurry of the development of innovative hybrid financial products. An increase in the number of connections will facilitate the seamless flow of capital between traditional / centralised finance and DeFi thereby legitimising the world of crypto in India.It is widely expected across the cryptocurrency world that India will announce and implement a proper set of regulatory guidelines for the protection and understanding of its 20 million investors in 2024. It is no secret that clearer regulatory frameworks may provide a sense of security for investors and businesses, fostering a more robust and stable ecosystem. The institution of these much-needed guidelines will go a long way in bringing about a great deal of clarity and regulation from various jurisdictions, which could positively impact the adoption and use of Bitcoin on a global scale.

Privacy remains a fundamental concern in the cryptocurrency space, and in all likelihood 2024, will see an increased emphasis on privacy enhancements, such as the integration of technologies like CoinJoin and Confidential Transactions. These features could offer users greater privacy and fungibility, making Bitcoin transactions more confidential and resistant to surveillance.Often dubbed “digital gold” and a hedge against economic uncertainties, with as geopolitical tensions and economic uncertainties likely to persist at least through H1 2024. Bitcoin may continue to attract investors seeking a store of value and a diversification strategy. While Bitcoin is primarily known for its role as a digital currency, developments in 2024 may pave the way for the integration of smart contracts on the Bitcoin network. This would bring additional functionality to the Bitcoin blockchain, allowing for more complex programmable transactions and potentially expanding its use cases.

Over the course of the last few years, the process of altering real-world assets into digital tokens, is gaining some serious momentum. 2024 is expected to see tokenizing of traditional assets, such as financial assets, commodities, real estate, or even intellectual property, fractional ownership can be created, liquidity could be enhanced liquidity, while allowing for democratize access to these modern asset classes. 2023 saw a rise in Ordinals making use of the Taproot upgrade. Ordinals are basically NFTs on bitcoin. Ordinals emphasizes Premium art and we predict this market would see a substantial rise with many startups emerging in 2024. This is one of the factors of driving fees up. In the New Year, investors can expect further advancements in tokenization protocols and the emergence of tokenized assets enabling individuals the opportunity to invest in a wider range of assets using lesser amounts of capital. With greater tokenisation comes a more viable opportunity for institutional investors to diversify their investment portfolio.

The Bitcoin industry is more than likely to see a significant increase in the number of ETFs especially after the filing of a Bitcoin ETF by BlackRock which will go a long way in opening up the participation Institutional investors in the Bitcoin world. A financial player as large and reputed as BlackRock entering the world of Bitcoin in 2023 bodes well for 2024 when it comes to the adoption of digital crypto assets. This action of BlackRock has shown that the future of Bitcoin is extremely bright with their more than likely integration into the financial world. 2024 could just prove to be the year of Crypto ETFs as other institutions are watching and waiting for regulatory approvals before they decide to follow suit and change the world of Bitcoin forever.

Despite never-ending criticism from the naysayers, 2024 promises to be a pivotal year marked by the promise of a great deal of financial innovation in the world of cryptocurrency. Moving further into the digital age will see greater in the whole ecosystem of Bitcoin and other cryptocurrencies resulting in Bitcoin being poised to play an increasingly significant role in the global financial landscape. Keeping an eye on these emerging themes will be crucial for investors, enthusiasts, and industry participants as they navigate the dynamic and exciting world of cryptocurrency in 2024.

(Roshan Aslam is Co-founder & CEO at GoSats)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

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