Market size growth forecast
Brad Garlinghouse, CEO of blockchain startup Ripple, predicts that the cryptocurrency market will double in size by the end of 2024, with a total market value expected to exceed $5 trillion.
Technological innovation drive
• Bitcoin ecosystem expansion: Innovations such as the ordinal protocol have created possibilities for NFT and other applications on the Bitcoin chain, driving the rise of the Bitcoin ecosystem.
• Ethereum upgrade: Ethereum 2.0 transition and Cancun upgrade, etc., solved the scalability and cost issues, further consolidating its dominant position in the public chain field.
• Development of Layer2 solutions: Off-chain expansion solutions such as side chains, state channels, and roll-up mechanisms continue to emerge, increasing transaction speeds and reducing costs, and the importance of cross-chain technology and interoperability is becoming increasingly prominent.
• Acceleration of decentralized applications: Decentralized applications such as decentralized finance continue to develop, and platforms such as Uniswap on Ethereum continue to evolve, providing new ways for financial services.
Market demand and capital inflow
• Bitcoin spot ETF approved: On January 10, Bitcoin spot ETF was approved by the US SEC for listing, providing a new channel for investors, attracting a large amount of capital inflow, increasing the market size and liquidity of Bitcoin, and also improving the compliance and investability of digital assets.
• Institutional investors enter the market: Traditional financial institutions such as pension funds and insurance companies are increasingly involved in the cryptocurrency market, driving market development.
• Rising global liquidity cycle: The global liquidity cycle in the expansion phase makes Bitcoin, as a liquidity sponge and inflation hedging tool, its price is positively affected.
Market structure changes
• The characteristics of a seller's market are obvious: pre-sale terms favor sellers, capital turnover slows down, and more paper gains are locked in, which may extend the duration of the bull market.
• Altcoin performance differentiation: The carried-over altcoins have created a higher foundation for the bull market outbreak, but with the surge in the number of projects, altcoins are facing a dilution effect. Altcoins with reliable projects, legitimate teams and strong foundations are more valuable for investment.
Improved regulatory environment
Regulatory policies in various countries are gradually improving. For example, Hong Kong, China, with its advanced financial regulatory system, actively participates in the formulation and implementation of adaptive, forward-looking and internationally consistent regulatory policies, promotes the balanced development of technological innovation and financial security, and provides guarantees for the stability and development of the cryptocurrency market.
