Key Insights:
The year 2024 will be the most valuable year for crypto in the coming decade with increased benefits and broad adoption.
Among all, three factors that are poised to play a major role in ensuring its success are Bitcoin ETFs, Proto Dank Sharding in Ethereum and Liquidity re-staking.
If everything goes well for these three events, crypto markets will touch a new high before the end of 2024.
Bitcoin ETFs will revolutionize and democratize the ownership of cryptocurrency once approved. It will enable even the most non-tech person to easily own Bitcoin and that also without any hassle. These ETFs can be bought and sold in the same way as stocks and other ETFs.
Further, spot Bitcoin ETFs will bring the crypto in the scope of a well-regulated asset in the USA. This would open the doors of crypto for investment funds, pension funds, wealth funds, sovereign funds, family offices, private equity and several other funds that want to tap into Bitcoin's benefits.
Together, they would take the price of Bitcoin several times higher than current levels.
Also, Bitcoin ETFs will open the way for other crypto ETFs in a similar way as mutual funds. Ethereum ETFs are already in the line and other valuable cryptocurrencies would also find an ETF with their name on it. Metaphorically, crypto owning would be as easy as owning a toothbrush.
Only 39% of financial advisors are expecting a Bitcoin ETF approval in 2024.
However, top financial experts from Bloomberg are confident in the range of 90% that Bitcoin ETFs could be approved as close as January 5, 2024.
Anonymous Crypto Analyst Haska shows a poll that 50% of voters believe that Bitcoin's price will boom higher than 5% if ETF are approved.
And about 22.3% believe that prices will crash because ETF approval has already been priced in.
Whatever be the case, our experience suggests that one should not be euphoric and bet all your funds on one event. Neither you should lament if you have missed the trend. Opportunities come plenty in crypto bull markets.
Even if Bitcoin ETFs are approved today on January 05, 2024, you should avoid any emotional decision at this stage. The entire rally of Bitcoin is centered around this Bitcoin ETF.
Even if they are approved tomorrow, there is an expectation of an immediate profit booking that might take the prices lower than even the pre-approval levels.
Ethereum's Duncun Upgrade (EIP-4844) or Proto Dank Sharding aims to split the total number of validators into shards which will increase the speed of transactions by several times.
Though it seems as a L2 killer, yet, it is beneficial for major L2s as their transaction costs could get cheaper by 10x.
An analysis of two major L2s: Arbitrum and Optimism show that their market caps have recently surged. This indicates a buying interest for their governance tokens. Optimism is up 180% in the last 3 months while Arbitrum is up 130% for the same period.
In January 2024, Arbitrium's trading volume has surpassed Ethereum for the first time in history. The below image from DeFi Llama shows that on 05 Jan 2024, Arbitrum's daily trading volume was $390 million higher than Ethereum.
One reason could be Arbitrum's short term incentive program where 50 Million ARB tokens were distributed across different protocols that develop Arbitrum dApps. It is estimated that this move resulted in a 50% increase in Arbitrum's TVL.
Liquidity Provider Tokens or just LP Tokens were those which were awarded to people who deposited any kind of liquidity (ETH, Stablecoins, etc.) to any liquidity pools.
Till now it was a huge dilemma as to what should users do with these LP Tokens. They just sat idle in the user's wallets.
The Ethereum TVL is at $28.5 Billion (Jan 05, 2024) as per DeFi Llama. The top 5 leaders in the staking market are Lido, Rocket Pool, Frax Finance, Coinbase and Ankr Protocol.
However, that changes with Re-Staking as users would be able to again stake their LP Tokens and get staking rewards. This would help them reap double benefits, first with liquidity staking and then with staking LP tokens.
The tech which would make this possible will be launched as EigenLayer. It is an infrastructure layer that would enable re-staking LP tokens or to validate with LP tokens as collateral.
Data from Into The Block shows that more than 70% of $1 Billion of pre-launch staking in EigenLayer have come from liquid staking.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.