This time of year is a unique opportunity for intergenerational dialogue and looking ahead with optimism. Recently, a mother-son pair of crypto enthusiasts discussed the potentials and challenges that crypto will face in 2024. Although their views on topics such as decentralized finance and the U.S. impact on global crypto adoption diverged, they both agreed that the coming year, albeit demanding, could be a turning point for digital assets.
The current negative reputation of crypto has been attributed to three main issues: institutional distrust, lack of clarity in valuation and an excessive focus on speculative investments. This is reflected in the words of influential figures like JPMorgan Chase CEO Jamie Dimon and Securities and Exchange Commission Chair Gary Gensler, who have expressed concerns about crypto’s relationship with illegal activities and regulatory violation.
This skepticism has hindered institutional support for crypto, such as Berkshire Hathaway’s negative stance on the asset class, which goes against Warren Buffett’s early investment in speculative pink sheet ventures. To regain trust, it is essential that effective due diligence, risk management and a zero-tolerance policy for fraud are put in place. This has been reinforced by recent enforcement actions against frauds in the crypto sphere, such as those against Binance and FTX, and the unanimous passage of the Deploying American Blockchains Act of 2023 by Congress.
For 2024, two developments stand out. The first is the SEC approval of spot bitcoin ETFs; this could increase enthusiasm and trust in digital assets by alleviating regulatory ambiguities and valuation doubts. The second is the modernization of U.S. capital markets, spearheaded by the T+1 trade settlement deadline, Blackrock CEO Larry Fink’s prediction of a tokenomics-driven market and Figure’s use of the Provenance blockchain.
Therefore, the hope for 2024 is that the crypto community will be able to establish a narrative that promotes zero tolerance for fraudulent activities and a clearer understanding of use cases. This could help to shape a more positive perception of crypto, leading to further growth and progress.
