In 2024, significant growth and development are expected in key areas of the blockchain industry and Web3 technologies, which represent potential key directions for the future of the crypto market. Industry experts share their opinions and forecasts regarding trends that began to emerge in late 2023 and those that may dominate over the next year.
- Progress in integrating cryptocurrencies with the traditional financial system
- Market transformation through asset tokenization in real estate and other sectors
- Implementation of Web3 technologies in the carbon credit segment
- Evolution of first, second, and third-order blockchain systems and cross-chain interaction mechanisms
- Strengthening of stablecoin market positions and the development of their ecosystems
- Expansion of sectors such as SFT, NFT, AI, DePIN, etc.
- Enhanced measures for verifying the identity of cryptocurrency owners
Progress in integrating cryptocurrencies with the traditional financial system
Anton Toroptsev, regional director of CommEX, asserts that in 2024, attention will be focused on services that act as a bridge between the traditional financial system and the world of cryptocurrencies. These universal applications will have extensive functionality, allowing users to manage both their fiat accounts and cryptocurrency assets.
Markus Kraus, a finance expert and author of the Trading Verstehen blog, also notes the acceleration of cryptocurrency adoption by institutional players as a significant trend, reinforced by legislation and blockchain progress.
Austin Hare from Leaders Real Estate predicts a reduction in barriers between traditional finance and blockchain, believing that tokenization plays a key role in this. He anticipates that conventional financial institutions will actively embrace tokenization to create innovative blockchain-based products and services while maintaining a familiar user experience for clients.
Market transformation through asset tokenization in real estate and other sectors
Austin Hare highlights asset tokenization as a key direction for 2024, emphasizing the transformative potential of transferring rights to assets into blockchain-based digital tokens, particularly impacting the real estate sector.
He underscores several advantages that tokenization can bring in the near future:
- By making high-value assets, including real estate, more accessible to a wide range of investors by dividing them into smaller shares, tokenization opens up new investment opportunities previously only available to large investors and institutions.
- An important advantage of tokenized assets is their increased liquidity. In 2024, platforms and exchanges supporting tokenized assets are expected to facilitate their easier and faster acquisition and sale, minimizing liquidity issues typical of some asset types, such as real estate.
- Expanding the scope of tokenization to other asset classes, such as art, collectibles, and even intellectual property rights, will provide investors with broader portfolio diversification opportunities.
- With the establishment of clearer regulatory frameworks and norms for digital assets, trust and prevalence of tokenization are expected to increase, stimulating participation in the tokenized asset market by both major investors and institutional participants.
- Tokenization increases transaction transparency and security. With technology advancements in 2024, even more secure and reliable systems for tokenized asset operations are expected to emerge. "Tokenization promises to redefine the rules in many industries, offering improved access, liquidity, and operational efficiency. Interaction with traditional finance and the expansion of tokenized asset spectrum are likely to make it one of the leading trends in the cryptocurrency market in 2024," concludes Austin.
Ronen Kozokaru from 8081 and Alexandra Korneva from Rubic also emphasize the significance of tokenization, pointing out its revolutionary potential in bridging the physical world with the digital space of blockchain, leading to radical changes in areas such as real estate, identity verification, art, and media, where physical assets will be transformed into digital tokens. This transition will not only ensure property rights protection but also offer more reliable solutions compared to existing digital and paper-based systems.
Sasha Grumbach from Green Mining DAO sees the future of tokenization in new investment opportunities with fractional ownership and programmable characteristics, as well as predicts increased attention from regulators and the development of regulatory frameworks, promoting transparency and mass adoption of the technology.
Implementation of Web3 Technologies in the Carbon Credit Segment
Daniel Kennedy, head of Mercurity Fintech Holding, highlighted the use of Distributed Ledger Technology (DLT) to verify the legitimacy and quality of carbon credit transactions and the creation of tokens to visually express their value, thereby simplifying the trading process, as one of the key development directions in 2024.
"The global carbon credit market plays an important role, requiring organizations and states to compensate for carbon dioxide emissions. At the same time, regulation of this process at the global level remains lax, leading to various contradictions and inconsistencies at the local level. Issues such as double counting make trading in carbon credits insufficiently transparent. Blockchain offers a solution by providing a reliable and detailed record of each carbon credit, including information about its carbon footprint from the moment of creation. The introduction of tokenized credits will improve transparency, fairness, and information accessibility for investors, contributing to the formation of a new segment in the global market," notes Daniel.
Evolution of First, Second, and Third-Level Blockchain Systems and Cross-Chain Interaction Mechanisms
David Winkles from the ICON Foundation expresses confidence that the overall market will strive to improve the interaction of diverse blockchains. According to him, interchain technologies surpassing the limitations of existing EVM compatibility will play a key role in this process.
Ronen Kozokaru from 8081 underscores the importance of developing first-level blockchain networks to implement scalable and efficient solutions in the Web3 sphere.
K. Ronen believes that first-level networks serve as the foundation for a multitude of applications specialized for various tasks. In the context of global cryptocurrency adoption, these technologies play a crucial role in facilitating payments between networks, enhancing security, and streamlining application operations. They act as a bridge for integrating diverse protocols and networks into a unified blockchain ecosystem.
Alexandra Korneva, heading Rubic, foresees that the cryptocurrency market in 2024 will continue to evolve through improving compatibility between different blockchain networks. In her view, the active adoption of airdrops from projects such as zkSync and LayerZero will contribute to increased user activity and trading volumes.
Anton Shustikov from CakesCats anticipates progress in third-level solutions and interchain protocols, which will stimulate wider cryptocurrency acceptance and foster the development of new blockchain technology applications for specific business segments.
Strengthening Market Positions of Stablecoins and Development of Their Ecosystem
Sasha Grumbach, founder and head of Green Mining DAO, anticipates the expansion of stablecoins presence in the market in 2024, including the development of associated products and services. He notes that new initiatives in the stablecoin sphere will aim to replicate the success of USD-backed stablecoins such as those issued by Circle and Tether. Grumbach foresees that USDC and USDT will maintain their leading positions in the market due to secured compatibility, network effects, and established reputation.
In his view, Tether in 2024 may be at a turning point in its development due to potential regulatory tightening, which could lead to audits or delisting from platforms. Current regulatory challenges and delisting risks could significantly impact the company's market positions.
Expansion of SFT, NFT, AI, DePIN, and Other Sectors
Denis Astafiev, founder of the investment agency SharesPro, outlined several key directions in the cryptocurrency sphere that may become particularly relevant in 2024:
| No. | Topic |
|---|---|
| 1 | Innovations using Zero-Knowledge Proof (ZKP) technology |
| 2 | Game industry GameFi with NFT and gaming tokens |
| 3 | Initiatives in the decentralized physical infrastructure sector (DePIN) |
| 4 | Projects in the Web3 sphere integrating artificial intelligence |
| 5 | New developments in the Bitcoin ecosystem |
| 6 | Tokenization methods for real-world assets |
| 7 | Expert opinions on perspective directions |
Christopher Smithmayer, one of the founders and CEO of Black Wallet Limited, believes in the future viability of cryptocurrencies as a means of future transactions. He highlights their advantage in transaction speed, making them optimal for everyday use.
According to him, the KIROS stablecoin, a second-generation innovative product, provides stability of value reflecting the real purchasing power of the consumer basket, allowing for the mitigation of inflation risks associated with traditional currencies and first-generation stablecoins. Alternative currencies, such as SOL and PI, in Smithmayer's opinion, have the potential to become mass-use currencies unlike BTC and ETH, which are more likely to serve as a savings instrument for large investors. He anticipates that regular users and organizations will actively use altcoins for daily transactions, while large capitals will remain faithful to Bitcoin and Ethereum.
Smithmayer also highlights the significance of Semi-Fungible Tokens (SFT) for the financial sector and securities market.
NFTs, tokenization, and real-world blockchain usage will be key directions in 2024, according to Steven Fainer, CEO of ABF Group. He foresees the merging of digital and real worlds through blockchain, leading to significant societal changes.
Increased interest in artificial intelligence in the context of crypto projects is noted by Alexandra Korneva from Rubic, expecting a breakthrough in this area in 2024. This opinion is supported by Daniel Kennedy from Mercurity Fintech Holding, pointing to the accelerated integration of AI into Web3 projects.
Ronen Kozokaru, head of 8081, emphasizes the important role of AI in improving the security and efficiency of cryptocurrency operations, predicting significant industry changes due to the synergy of blockchain, tokenization, fintech innovations, and AI technologies.
Anton Shustikov from CakesCats expresses caution, warning of fraud risks in the Crypto AI sector amid general excitement.
In the fintech field based on Web3 technologies, rapid progress is expected, emphasizes Ronen Kozokaru, pointing to the development of new applications for cryptocurrency management. Dmitry Noskov from StormGain adds that Web3 will offer enhanced solutions for ensuring security and reliability in financial markets, including the development of digital national currencies.
Enhanced Measures for Verifying Cryptocurrency Owners' Identities
The main legal trend in the cryptocurrency market in 2024 is the strengthening of control over the identification of users of crypto services and the introduction of international data exchange on cryptocurrency owners. TThese measures are aimed at ensuring that government agencies can effectively monitor the movement of capital, combating money laundering, tax evasion, corruption and the financing of political initiatives. This conclusion was drawn by Natalya Kordyukova, an expert in taxation and foreign economic activity, substantiating it with subsequent data.
In November 2023, 48 countries confirmed their readiness to exchange information on cryptocurrency transactions within the Crypto Assets Reporting System (CARF), approved by the OECD Committee on Financial Affairs in June. These countries include Cyprus, Lithuania, Luxembourg, Malta, Singapore, and Switzerland.
CARF is an analogue of the Common Reporting Standard (CRS) financial information exchange system created by the OECD in 2014 and joined by most major global banking systems. However, unlike CRS, which concerns banks, CARF regulates the actions of participants in the crypto market. The project involves collecting data on cryptocurrency exchange customers, including their tax residency and information on transactions conducted, with subsequent transmission of this information to national tax authorities for income and transaction verification.
The planned start of information exchange under the CARF system is scheduled for 2027, with the European Union intending to start a year earlier. Considering the need for crypto service providers to adapt their internal procedures, it is expected that regulatory initiatives will be intensified in the market by 2024:
- Strengthening requirements for user identification and documentation of their transactions;
- An increase in scandals and sharp statements by regulators, aimed both at supporting and criticizing the principles of market transparency;
- The reorientation of some, especially smaller, exchanges to jurisdictions that have not joined CARF.
According to Kordyukova, as a result, the market will divide into a 'white' zone, fully compliant with the new transparency standards, and a 'black' one, where such standards are ignored, with the gradual disappearance of the intermediate segment.
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