VanEck predicts that $40 billion will flow into Bitcoin ETFs and $100,000 of BTC will flow into Bitcoin ETFs in 2024.

The 2024 forecast from VanEck, a global investment management firm for cryptocurrencies, presents a transformative year for the cryptocurrency sector, highlighting the pivotal events and trends that will redefine the digital asset landscape, from economic fluctuations to groundbreaking technological advancements.

The forecast is based on analysis of more than just the cryptocurrency sector, looking at economic trends, technological developments, and regulatory dynamics. From the expected U.S. recession and the launch of a spot Bitcoin ETF aimed at strengthening Bitcoin’s resilience above $30,000 to the fourth Bitcoin halving to boost market value, these predictions are pivotal for the cryptocurrency journey. Illuminate the moment.

VanEck’s forecast also predicts that Ethereum will maintain its position below Bitcoin’s market dominance while outperforming major technology stocks and facing competition from other smart contract platforms. The NFT market, fueled by Ethereum and Bitcoin in 2024, is expected to expand to new heights, reshaping the landscape of digital collectibles. Meanwhile, the stablecoin space, especially USDC, is expected to see unprecedented growth.

The forecast also highlights a potential shift in exchange hegemony as emerging competitors challenge Binance’s leading spot trading position. Additionally, DEXs are expected to capture a significant portion of the spot trading market. Groundbreaking developments in blockchain-based games are expected. The game reached a milestone of mainstream acceptance by surpassing 1 million daily active users. Additionally, with the rise of DePi networks like Hivemapper and Helium, as well as Solana’s rise to a top three blockchain position, we expect widespread diversification within the blockchain ecosystem.

Lastly, a pivotal area highlighted by VanEck is the integration of know-your-customer (KYC) protocols into decentralized finance (DeFi), which is expected to usher in a new era of institutional participation. This marks a shift towards mainstream and institutional adoption of cryptocurrencies, along with new corporate accounting treatments for cryptocurrency holdings.

VanEck predicts that a spot Bitcoin ETF will be approved in the first quarter.

VanEck predicts the U.S. economy will fall into recession in 2024, with economic momentum slowing and inflation cooling. This economic downturn, which has been marked by declines in leading indicators for 19 consecutive months, a weak raw materials market, and an increase in corporate bankruptcies, is creating a difficult situation. However, in this economic environment, the debut of the first U.S. spot Bitcoin ETF will be approved in the first quarter.

VanEck predicts that these ETFs will attract significant investment, paralleling the initial success of the SPDR Gold Shares (GLD) ETF, which launched in 2004. The GLD ETF experienced rapid inflows within the first quarter, capturing a notable portion of the gold market. Applying these metrics to Bitcoin, adjusted for the higher money supply of the current era, Bitcoin ETFs are expected to see surprising initial inflows of around $1 billion within the quarter, potentially reaching $2.4 billion. there is.

These significant capital flows into Bitcoin ETFs reflect deeper changes in the financial landscape. Since the U.S. Federal Reserve’s (Fed’s) M2 money supply is significantly higher than during the GLD launch period, the potential for Bitcoin ETF inflows has expanded, reaching approximately $40.4 billion over the first two years. The surge is partly due to the preference for Bitcoin as a form of ‘hard money’ amid concerns about national debt levels and inflation, which is expected to position it as an alternative to gold among investors.

Moreover, the expected lower trading costs of these ETFs compared to current retail trading fees suggest the potential for broader market adoption. These cost efficiencies have historically fostered widespread adoption of new technologies and have similarly helped propel Bitcoin ETFs into the financial mainstream. Despite the looming recession and potential market volatility, these developments indicate strong demand for Bitcoin, potentially keeping the price above $30,000 in early 2024.

Impact of Bitcoin halving and new Bitcoin ATH.

VanEck predicts that the fourth Bitcoin halving event scheduled for April will proceed smoothly without major disruptions. This halving will likely lead to the disconnection of unprofitable miners and a shift in the landscape towards miners with more efficient and cheaper power solutions. Despite an initial period of correction during which the market may experience some degree of consolidation, Bitcoin’s value is expected to rise. VanEck predicts that after the halving, the Bitcoin price could surpass $48,000 in April 2022, consistent with the observed technical pattern. This upward trend is expected despite some miners potentially underperforming the Bitcoin price, along with low-cost miners such as CLSK and RIOT. To outshine others. The post-halving period may also see significant growth for at least one publicly traded miner.

The second half of 2024 could bring even more dramatic developments for Bitcoin. Amid global political changes and increased global voting participation, Bitcoin is expected to grow to new heights. This period of heightened political activity and a likely changing regulatory environment, especially following the crucial US presidential election, sets the stage for Bitcoin to potentially reach all-time highs. VanEck speculates that Bitcoin’s value could reach new peaks by November 2024, potentially reaching $100,000 by the end of the year. This scenario, outside of any specific regulatory stance, could result in a groundbreaking moment for Bitcoin and its recognition in the global financial system.

Flipping won’t happen, but DeFi will rise.

Ethereum is poised to make significant progress, but it is unlikely to surpass Bitcoin in market dominance. Ethereum’s performance is expected to outperform even the largest technology stocks, but it may not achieve the long-speculated “reversal” of overtaking Bitcoin. Bitcoin’s clearer regulatory status and attractiveness due to its energy-intensive mining process are expected to attract interest from state-backed agencies in regions such as Latin America, the Middle East and Asia. In particular, Argentina could join the ranks of countries like El Salvador and the UAE in supporting Bitcoin mining at a national level, with a focus on exploiting stranded methane and gas resources.

At the same time, Ethereum’s layer 2 solutions are poised for significant growth following the implementation of EIP-4844, which promises to improve scalability and reduce transaction fees. This upgrade is expected to drive consolidation within the Ethereum network, with two to three layer 2 chains emerging as dominant players. These leading chains could potentially surpass Ethereum in monthly decentralized exchange (DEX) trading volume and total value locked (TVL). This change is likely due to reduced transaction costs allowing for more efficient trading and arbitrage opportunities. By Q4 2024, these Ethereum layer 2 chains could collectively double Ethereum’s current DEX volume and exponentially increase the number of transactions, signaling a significant development for the Ethereum ecosystem.

VanEck made a total of 15 predictions for cryptocurrencies in 2024.

1. The advent of the US recession and the debut of the spot Bitcoin ETF
2. Fourth Bitcoin Halving Without Event
3. Bitcoin hits all-time high in Q4 2024
4. Ethereum Market Position Behind Bitcoin in 2024
5. ETH Layer 2 dominance after EIP-4844
6. NFT activity has peaked at a new level.
7. Binance gives up first place in spot trading
8. USDC market share recovery has pushed Stablecoin market capitalization to record highs.
9. Decentralized exchange achieves record spot trading market share
10. Bitcoin Yield Opportunity Driven by Remittance and Smart Contract Platforms
11. The emergence of representative blockchain games
12. Solana surpasses Ethereum with DeFi TVL revival
13. Meaningful Adoption of DePin Networks
14. New accounting standards have strengthened corporate cryptocurrency holdings.
15. Harmonization of DeFi and KYC regulations

VanEck’s full report is available on the company’s website.