Within the cryptocurrency space, 2024 has already been a wild ride. Fraud is rearing its ugly head and prices fell hard in 2023. But as 2024 presses forward, there are surges happening within the market, particularly in the Bitcoin space. With $2.66 trillion in market cap, we’re close to the record high of 2021. In this article, we’ll explore the hottest and most impactful top trends and market movements in cryptocurrency.
Moving through the remainder of 2024, there are a few trends that will emerge. Some investors are keenly aware of these already while others will see the light bulb go on. Let’s take a closer look at the hottest and most impactful trends in the cryptocurrency market in 2024.
Central Bank Digital Currency (CBDC)
Though the entire point of BTC is to decentralize banking transactions, banking systems are moving to make the system to work to their advantage. Though there are plenty of sites looking to develop their own coins, banking systems creating their own currency could wind up having a much bigger impact than we know.
The goal is to create a virtual currency that is managed and centralized by central banks. The goal would be to garner all of the benefits with fewer risks like theft and fraud. China is currently piloting the biggest CBDC trial in the world. It is estimated that by 2030, there will be at least 15 retail CBDCs and 9 wholesale CBDCs operational.
Real-World Assets Becoming Digital: Cryptocurrency Top Trends
One of the biggest trends in crypto in 2024 is asset tokenization. The idea behind it is to take advantage of the blockchain technology that is at the core of cryptocurrency. A real-world asset could be tokenized, meaning that there is a digital representation of it somewhere on the blockchain. That can mean bonds, art real estate, and even intellectual property can be digitized.
Sometimes, tokenization can just be the automation of specific actions surrounding that asset. Sometimes it can be a means to enabling fractional ownership or increasing liquidity. More and more financial institutions are starting to take an interest in tokenization.
Cryptocurrency Top Trends: A Growing Impact on the Climate
Perhaps a lightly broached but still important trend in crypto is the energy costs and the potential impacts that it could have on climate change. Cryptocurrency mining, the proof of work concept, is believed to be a major potential contributor to environmental problems and energy shortages. Cryptocurrency mining uses about 1174 TWh of electricity, which is more than all of the Netherlands uses each year.
More interesting, United Nations scientists found that almost 70% of the energy used for crypto mining comes from fossil fuels. That’s not even taking into account the carbon emissions that come from crypto mining. With the Paris Agreement and climate goals on the horizon, the fear is that crypto mining could push the world well beyond those goals before long as a hottest and most impactful top trends and market movements in cryptocurrency.
Increased Regulation of Both Cryptocurrencies and Exchanges
A major detriment to the cryptocurrency industry is a lack of regulation. Though the SEC, the largest regulatory body in the United States, is taking measures, there are very few government bodies following suit. The lack of regulation hasn’t really done much to slow down Bitcoin but it is having an impact on others.
Because there is so little regulation within the industry, fraud and theft are commonplace. Even major coins like Ethereum have had their share of issues. Until compliance and regulations are commonplace in the industry, that will always be a challenge. Given the classification of cryptocurrency as a security investment, we could see it move in that direction from a regulation standpoint. We might not see anything ground-breaking in 2024, but changes are on the way.
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