Cryptocurrency Trends 2023-2024

The recent years have been complicated for the cryptocurrency market. However, today we can see the bull trend in the market. Such incidents as LUNA collapse and FTX crash influence this sphere and dictate new trends. One of them is the attempt to regulate crypto.
What are the main trends in the crypto sphere in 2023? What is waiting for the market in 2024? How will it affect the crypto sphere in the long term?
Find out the questions in this article where FinchPay Team shares significant predictions for cryptocurrency market development in 2023-2024.

A significant achievement occurred in 2021 when the first Bitcoin ETF was launched on the New York Stock Exchange. This development provided a conventional method for investing in cryptocurrencies allowing investors to buy cryptocurrency directly through traditional investment brokerages, like Fidelity or Vanguard.
While the BITO Bitcoin ETF is a step forward, some experts argue that it has limitations because it does not directly hold the crypto itself. Instead, the fund relies on Bitcoin futures contracts, which may not precisely mirror Bitcoin's price movements.
The SEC has previously considered approving ETFs. BITO is the first one to gain support. However, it's important to recognize that investing in an ETF like BITO still carries risks just like any other crypto investment.

At the beginning of 2023 the cryptocurrency market was currently experiencing a bear market phase. Prices of assets have significantly declined, causing investors to exit. This downturn often referred to as the 'crypto winter' is the fourth occurrence of such a situation. Each time it has lasted for over 20 months. Resulted in declines of more than 70%.

The current bear market has extended beyond 350 days. Can be attributed to the decline of LUNA, the downfall of FTX, user withdrawals, and the overall Fear, Uncertainty, and Doubt (FUD) prevalent in the industry. We have seen a significant drop in market cap levels compared to the all-time highs recorded in 2021 – a decrease of approximately 65%.
Some individuals even speculate that Bitcoin will experience a resurgence in 2023 and reach $35,000 by the end of the year. Factors such as temporary abstinence from rate hikes by the Federal Reserve and user sentiment are perceived as potential influences on Bitcoin's immediate value.
There is a connection between BTC halvings and bull markets. These halvings occur every four years reducing the rate at which new Bitcoins are released. Based on data from the previous two halvings it appears that these events mark the beginning of bull markets often followed by a significant surge in the market about a year later. The next Bitcoin halving will be in 2024 which holds great potential for impacting the market in transformative ways.

After gaining prominence in the crypto world with a valuation of $32 billion around mid-2021 FTX faced a dramatic turn of events. By November 2022 bankruptcy loomed over the exchange and its founder was subsequently arrested in December 2022.
Now one million creditors of FTX hold onto desperate hopes of recovering their combined $8 billion investments. However, experts specializing in bankruptcy predict that this process will be lengthy and arduous spanning years. Regrettably though not surprisingly they believe that creditors are unlikely to recuperate their investments.
The repercussions of FTXs downfall extend beyond individual cases as they bring about significant changes, in both investor behavior and corporate landscapes. FTXs bankruptcy had an impact on several companies. For example, BlockFi, a cryptocurrency lender, filed for bankruptcy in November 2022. Another company affected was Genesis Global Capital, which faced bankruptcy in January 2023 and had to halt customer withdrawals and new loans.

Web 3.0 is the version of the internet that brings about significant changes in website funding and personalization. It aims to reduce dependence on corporations and minimize the risk of single-point failures offering users a more sustainable solution.
The growing acceptance of Web 3.0 is expected to influence cryptocurrencies like Ethereum and Helium.

At times many organizations are boldly embracing cryptocurrencies. Giant brands such as Disney, Microsoft, Google, and Apple have entered the space. Moreover, crypto assets are being used in ways now with the rise of NFTs and integration into metaverses.
For instance, Microsoft is working on a blockchain-based "Virtual Office" solution using the "SharePoint" platform. This will facilitate efficient interactions among employees regardless of their physical locations. As corporate interest in cryptocurrencies continues to surge we anticipate witnessing an array of use cases and services leveraging these digital currencies.

What is expected for Ethereum in 2023? 2022 was a significant year in the Ethereum blockchain structure. There was the Merge that moved Ethereum to a PoS consensus mechanism. It has brought such changes as:

• Reduced energy consumption; With PoS Ethereum will be able to optimize its network nodes' computational resources leading to energy consumption.
• Deflationary Ether; By combining EIP 1559 with PoS, the circulating supply of Ether will decrease, potentially increasing its value due to increased scarcity.
• Enhanced scalability; The replacement of hash power with randomness will keep block size small enabling users with hardware to run a validating node efficiently and improve transaction speeds.

These numerous benefits offered by Ethereum 2.0 indicate a surge in usage throughout 2023.

The emergence and growing popularity of Layer 2 (L2) smart contracts suggest that they are here for the long term. Cryptocurrencies, like Bitcoin and Ethereum, fall under the 'Layer 1' category and operate on their settlement layer.
Layer 1 blockchain networks encounter difficulties with scalability, which's why there is a need for an additional framework called Layer 2 smart contracts. These contracts are crucial in enabling the use of cryptocurrencies, by offering unlimited scalability options.
Cryptocurrencies are currently under scrutiny for their impact on the environment, particularly Bitcoin mining, which is estimated to produce around 40 billion pounds of carbon emissions in the United States alone.

The crypto industry has a significant influence on energy consumption and climate change. According to a White House news release generating cryptocurrencies requires an astonishing 120 to 240 billion kW hours of electricity annually surpassing the combined electricity consumption of Argentina or Australia.

The primary concern lies in the Proof-of-Work consensus mechanism used by cryptocurrencies like Bitcoin. This process involves miners solving mathematical problems to add new blocks to the network resulting in high computational demands.
However, Ethereum's strategic shift in 2022 called 'The Merge' has revolutionized this approach by replacing Proof-of-Work with Proof-of-Stake. PoS relies on cryptocurrency holdings for verification purposes, which significantly reduces energy consumption. The Crypto Carbon Ratings Institute predicts that Ethereum electricity usage will decrease from 23 million MW hours annually to 2,600 MW hours.
But Bitcoin continues to have an appetite for energy and shows no signs of relenting. A single Bitcoin transaction consumes much energy as an average U.S. Household would in nearly 26 days. However, the network of miners strongly relies on Proof-of-Work as the way to maintain a truly decentralized system.
With the energy crisis becoming more severe the United States is grappling with the consequences of countries banning crypto mining. China, which used to account for up to 75% of mining activity shut down all cryptocurrency-related operations in 2021 transferring 35% of Bitcoin's computing power to the U.S.
In response to growing concerns measures are being taken to reduce energy consumption and pollution caused by crypto mining.

Looking ahead at the future of the cryptocurrency market it is expected that there will be regulatory scrutiny and calls for comprehensive regulation. The introduction of a CBDC (Central Bank Digital Currency) in the U.S. could have implications for the industry while the first Bitcoin ETF (Exchange Traded Fund) opens up new opportunities for investors. Despite the downturn in the market companies are still committed to exploring cryptocurrencies potential and Web 3.0 holds promise in revolutionizing website funding and personalization approaches. Moving forward it will be crucial for the industry to navigate challenges and opportunities carefully to build a sustainable and thriving ecosystem, for all participants.