Crypto in 2024: Building Trust and Embracing Growth

Beth and Clay Haddock argue that the potential approval of bitcoin ETFs in 2024 is highly likely to shift the perception of digital assets, after the industry faced a backlash in the past year.

Crypto faced reputation problems this year, but 2024 will fix that.

🌍 This time of year brims with intergenerational dialogue and forward-looking optimism. As a mother-son duo immersed in cryptocurrency, we recently explored the opportunities and challenges that crypto will encounter in 2024.

While our opinions diverged on topics like decentralized finance, or DeFi, and the U.S. impact on global crypto adoption, we concurred that the coming year, though challenging, could be transformative for the trust and growth of digital assets.

The Three Main Hurdles for Crypto in 2023

A primary hurdle for crypto in the past year has been its tarnished reputation, which we attribute to three main factors:

1. Institutional mistrust in digital assets: Influential leaders like JPMorgan Chase CEO Jamie Dimon and Securities and Exchange Commission Chair Gary Gensler continue to raise concerns about crypto’s association with illegal activities and regulatory noncompliance. Addressing these concerns through effective due diligence, risk management, and a zero-tolerance approach to fraud will significantly enhance trust and support.

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2. Unclear valuation process fueling skepticism: The lack of a standardized valuation process has fueled skepticism among investors. Clarity in valuation methods will be crucial for gaining institutional support.

3. Overemphasis on speculative investment: Crypto’s association with speculative investment has contributed to its negative reputation. Fostering a narrative emphasizing clear use cases and highlighting trustworthy projects can reshape the perception of crypto as a valuable innovation.

The Importance of Rebuilding Trust: Recent Enforcement Actions

The recent enforcement actions against fraudulent activities in the crypto sector, including the Binance and FTX cases, are crucial for rebuilding trust. Regulators’ firm stance against fraud paves the way for a more trustworthy environment, and the unanimous passage of the Deploying American Blockchains Act of 2023 by Congress signals growing support for digital assets.

Key Developments to Look out for in 2024

In 2024, two developments stand out that could shape the crypto landscape:

1. SEC Approval of Spot Bitcoin ETFs

SEC approval of spot bitcoin ETFs could stimulate more excitement and support for digital assets. This approval would clarify regulatory uncertainties and valuation concerns, benefiting the growth of other blockchain projects, including trustworthy stablecoins. Clarity and uniformity in stablecoin regulations will be essential for fostering a more robust and reliable ecosystem.

2. Modernizing U.S. Capital Markets’ Infrastructure

The push for modernizing U.S. capital markets’ infrastructure aligns with the demands of digital-native generations for efficiency and transparency. Initiatives like the upcoming T+1 trade settlement deadline and Blackrock CEO Larry Fink’s prediction of a tokenomics-driven market future underscore this trend. Institutional support for blockchain use cases designed to bring about these reforms, such as Figure’s use of the Provenance blockchain, is expected to increase in 2024.

Looking Ahead: Reshaping Perceptions and Embracing Growth

In summary, 2024 presents an opportunity for the crypto community to champion a narrative emphasizing zero tolerance for fraud and highlighting clear use cases. By addressing concerns surrounding legitimacy, valuations, and speculative investment, the industry can reshape perceptions of crypto, fostering trust, and setting the stage for a year marked by significant growth and innovation.

📚 Further Reading:

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We hope you found this analysis valuable! If you have any questions or thoughts about the future of crypto or any related topic, feel free to leave a comment below. And don’t forget to share this article with your friends and colleagues on social media!

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