It has not been an easy year for the industry. cryptocurrenciesHowever, the numbers are still quite positive. The total market capitalization of digital currencies increased by over 138%; This represents an increase of more than $870 billion in capital compared to the previous year, and Bitcoin achieved a yearly increase of 152.53%. With exceptions such as Ether or Binance cryptocurrency, which gained 91.95% and 25.69% respectively, the rest of the digital currencies gained more than 150% in value in 2023. The long distance per sun comes to the fore in the ranking. increased by 937.55% annually. 2023 was the year of recovery: The FTX debacle of November 2022 was still felt in the first half of the year, especially with the bankruptcy of Signature Bank. And 2024 is the year of consolidation. The industry agrees that it is optimistic about the implementation of the European MiCA Act, the world’s first regulation, which will lead to greater acceptance among institutions and banks.
Javier García de la Torre, Director of Binance Spain and Portugal, summarizes the general sentiment as follows: “On the horizon of 2024, the outlook for cryptocurrencies is subject to a number of factors, such as the evolution of regulations, technological developments, etc.” advances and market confidence”. Without a stable regulatory framework, it does not improve the reputation of assets that are still exposed to the consequences of FTX and frauds that are widespread around the world. The European Union has taken a giant step by positioning itself. MicaThe first regulation and regulation allowing the transfer of Bitcoin and electronic money tokens Laying the regulatory groundwork in the world’s major economies. “The approval of the MiCA regulation in Europe has created an environment of greater legal security,” explains Almudena de la Mata, founder of Blockchain Intelligence. “Traditional banks are working on models to offer custody and trading services to their customers.” And with them, the use of crypto assets is becoming widespread and normalized.
exactly what will happen Banks with the future of cryptocurrencies in their hands. “It will not take long to see how someone can open a Bitcoin account in a bank, deposit their assets there and transfer the trust of the assets they have held so far to the banking institution,” says Ángel Luis Quesada. CEO of Onyze. This is a chain reaction of regulatory practices in EU Member States: If there is support from regulators, there will also be support from the banking sector, which will see a new window of business in cryptocurrency accounts. “MiCA will be a starting signal for banks, where in the coming years almost all banking institutions in the world will gradually offer bitcoin to their customers,” says Leif Ferreira, co-founder and CEO of Bit2Me. This will lead to “mass adoption of retail,” he adds.
The advent of ETFs
Once a regulatory framework is established, the next step is institutional acceptance. The ‘crypto’ scene has been revitalized in recent months. Possible creation of an ETF consisting of Bitcoin spot prices. The market has seen around 12 applications for Bitcoin spot price ETFs; some of these came from large asset managers such as BlackRock, Fidelity, Wisdom Tree or Invesco. Without going any further, Blackrock acknowledged that it had received “strong demand for bitcoin” from its customers. “A spot bitcoin ETF offers investors the opportunity to invest in bitcoin without these managers actually owning the currency, as it is hedged by investment funds, thus avoiding storage and security challenges,” EurocoinPay CEO Herminio Fernández is developing. It would be an attractive product both for institutional investors due to its low costs and regulatory advantages, and for individual investors who have so far avoided including bitcoin in their portfolios due to the difficulty of working directly with blockchains.
HE Deadline: January 10, 2024 for the U.S. Securities and Exchange Commission (SEC) to decide. Whether to approve or reject Bitcoin exchange-traded fund application Other application deadlines for the application, jointly submitted by Ark Invest and 21 Shares, close around March. Of course, if the first ETF is approved, “it will happen together because many of the products share the same characteristics, and the SEC should not support any of them,” says Julius Baer next-generation research analyst Manuel Villegas. For now, the winds seem to be in his favor. The SEC had been meeting frequently with BlackRock, Grayscale, Fidelity and Invesco about the issue, and at least two of those managers had been instructed by the regulator to submit final changes to their forms before Dec. 29, Reuters has learned.
It is worth remembering that the SEC stood out this year by toughening its stance against cryptocurrencies and taking actions against the industry’s best-known exchange platforms such as Coinbase or Binance. In this sense, EAE Business School professor Selva Orejón explains that companies in this sector “are trying to build a solid reputation, address public concerns and highlighting their efforts in safety and regulatory compliance“, so transparency and effective communication are “essential.”
The formula to increase the price of Bitcoin is ‘halving’
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The crypto asset market looks to 2024 with particular expectation: Bitcoin’s ‘halving’. Bitcoin every four years Halves reward for each block mined. Known as the ‘halving’, this event stipulates that for every 210,000 blocks added to the blockchain (approximately every four years), the reward given to miners and the number of new bitcoins put into circulation are cut by 50%. “The token economics that drive this blockchain are based on the fact that a total of 21 million bitcoins will be mined, with either decreasing supply or new asset issuances,” explains Simon Peters, eToro’s expert crypto assets analyst.
Supply shock is caused by ‘halving’, Scheduled for April 2024This “will cause the reward for each block to decrease from 6.25 bitcoins to 3,125 bitcoins and reduce bitcoin’s own annual inflation rate from 1.7% to around 0.85%.” Traditionally, this reduction in supply added to demand usually translates into: price increase of queen cryptocurrency. “Since Bitcoin has about half the capitalization of the total market, this often triggers a new bullish cycle for the entire industry,” says cryptocurrency expert Víctor Ronco.