(MENAFN- AzerNews) bitcoin is in for a "very explosive" year in 2024, from
exchange-traded funds (ETFs) to legislation and regulation in
crypto assets, an expert told Anadolu.
"From the exchange collapses and corporate fallout of 2022, to
the regulatory battles of 2023, the crypto industry is still here
and growing," said Brandon Zemp, CEO of BlockHash LLC, a blockchain
consultancy providing educational resources for small business
owners, students, developers, and investors.
Bitcoin, as well as other CryptoCurrencies and some stable
coins, which are pegged to the value of a separate asset, crashed
in 2022 amid several crises, including the bankruptcy of several
companies and exchange platforms, causing turmoil in the market as
a lack of regulation and accountability has shaken investor
confidence in digital currencies and tokens.
The size of the entire crypto market plummeted to around $790
billion by the end of 2022 - down almost 65% from its $2.25
trillion close in 2021 as more than $1.4 trillion evaporated that
year, according to data compiled by Anadolu. Once the world's
third-largest cryptocurrency exchange by daily trading volume,
FTX's collapse in late 2022 also led to a sudden meltdown in the
crypto market.
"Crypto is cyclical by nature. That's an inevitable fact. But
many of the collapses have come as a result of overzealous,
laser-eyed investors buying colorful JPEGs and creating vaporware
for the sake of taking an investors money. Every industry attracts
a similar crowd, especially when there's an opportunity to profit,"
said Zemp, who is author of the book, "The Future Economy: A Crypto
Insider's Guide to the Tech Dismantling Traditional Banking."
Sam Bankman-Fried, the former CEO and founder of Bahamas-based
cryptocurrency trading platform FTX, is currently on trial in a New
York federal court, facing eight charges - conspiracy to commit
wire fraud and securities fraud, standalone charges of conspiracy,
securities fraud and wire fraud, money laundering and conspiracy to
defraud the US, as well as campaign finance violations.
After the US Securities and Exchange Commission (SEC) in June
filed 13 charges against Binance, the world's largest
cryptocurrency exchange platform, the company agreed in November to
plead guilty to criminal charges, forfeit $2.5 billion to the US
government and pay a fine of $1.8 billion. Its CEO Changpeng Zhao
pled guilty to several criminal charges in the US and resigned from
his role.
Regulations
"The good news is that crypto is here to stay and bad actors are
constantly being flushed out of the market, driving more awareness
for better practices and safeguards. A bull market is on the
horizon again, and this one might be more stable and last longer
due to bad actors being removed from the industry," said Zemp.
The expert, who hosts the podcast "Blockhash: Exploring the
Blockchain," where he interviews top executives and founders in the
industry, emphasized that regulations are very important and have
the potential to either elevate or disrupt any industry.
"In the past two years, there has been a lot of regulation by
enforcement, which has led to a lot of disruption. But I'm hopeful
for the direction crypto is heading entering 2024, as there is US
legislation on the table to help bring regulatory clarity to the
market," he said.
Zemp noted that there were instances when the courts have
started to side with crypto companies that were being attacked by
the US regulators like the SEC.
Ripple Labs, owner of the currency exchange Ripple or known by
its native cryptocurrency XRP, faced legal action in December 2020
from the SEC, which claimed that the company was selling
unregistered securities. After years of legal battle in court, a US
judge ruled this July in favor of the firm, coming to the
conclusion that XRP, as a token itself, is not a security.
"I would hate for things to be decided in court, but there is
hope for an actual crypto bill in 2024," said Zemp. "In the
meantime, regulators will continue to plunge their fangs into the
industry, and crypto will continue to resist."
Rebound with hope on ETFs
Despite all the turmoil, Bitcoin saw its price strongly rebound
in early December, climbing above $44,000 for the first time since
early April 2022 amid investor optimism that spot Bitcoin ETFs
would get approval in the US.
ETFs are a type of investment fund traded on a stock exchange
with their own financial assets such as equities, currencies,
debts, futures contracts, and commodities, with spot Bitcoin ETFs
primarily owning Bitcoin.
Zemp highlighted that many investors are optimistic about the
long-term market effects that a spot Bitcoin ETF may bring to the
crypto market, mainly investments from asset managers, sovereign
wealth funds and other institutional investors. "This will bolster
Bitcoin's price and help bring Bitcoin to the masses as a
mainstream asset," he said.
While stopping short of explicit forecasts for specific
cryptocurrency or crypto assets, he stressed that crypto is a "very
cyclical industry and it feeds off of market momentum."
"Factor in ETFs, Bitcoin's halving, a presidential election,
crypto legislation and US dollar inflation, you have yourself a
very explosive 2024 waiting in the lineup," he concluded.
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