The cryptocurrency market had a stellar 2023, with the total value of all assets increasing 115% so far this year. Bitcoin (BTC) and Ethereum did most of the heavy lifting, even though there are millions of cryptocurrencies available.
For the record, Bitcoin and Ethereum had a combined 58% of the $795 billion cryptocurrency market capitalization at the end of 2022. However, of the $1.71 trillion cryptocurrency market cap as of December 28 By 2023, 67% came from these two titans.
With that backdrop in mind, it is more important to consider where digital currencies are headed than their past whereabouts. Here are four controversial cryptocurrency predictions for 2024 after an incredibly prosperous year.
Controversial cryptocurrency predictions for 2024
The cryptocurrency market has The year started well. However, there is still room for surprises, as these controversial predictions reveal.
1. Bitcoin's theme for 2024 will be "Buy the rumor, sell the news"
There are several explanations as to why Bitcoin increased in value by more than 160% in 2023. This includes the expectation of the Bitcoin "halving" event, which is expected to take place in April 2024, the optimism that feel in the major US financial markets and hope. that the Securities and Exchange Commission (SEC) would approve a spot Bitcoin exchange-traded fund (ETF) in January.
Understandably, the cryptocurrency market witnessed a sharp sell-off after the SEC approved spot Bitcoin ETFs. Bitcoin fell as low as $38,500 in a few days, a price that has now become its most recent low.
In line with the trend, market participants can expect more โbuy the rumor, sell the newsโ events on the Bitcoin price this year. For example, the market will most likely peak in the period leading up to The Next Bitcoin Halving. Another spike could be expected if US-based funds gain approval for an Ethereum-based ETF.
Savvy investors may choose to time their cryptocurrency selling around these key milestones, with the opportunity to buy them back later, after the โsell the newsโ events described above.
2. Dogecoin will continue to underperform
Most likely, very famous "dog" coins, such as Dogecoin (DOGE) and Shiba Inu (SHIB), will continue to lose value compared to the entire cryptocurrency market. The value of Dogecoin and Shiba Inu tokens increased by 35% and 36%, respectively, in 2023. Although this is a better year-to-date performance than the S&P 500, it is still well below Bitcoin's gain of 160% or more.
The main problem with Dogecoin and Shiba Inu is that they are simply meme-based cryptocurrencies. While strong communities have emerged around them, it is difficult to imagine a rally similar to that of 2021. At their peak, Dogecoin and Shiba Inu reached highs of $0.7376 and $0.00008845, respectively.
With these dog-themed coins still trading more than 80% below their previous highs, investors should quickly lower their expectations. After all, there are now thousands of other meme-based cryptocurrencies, including BONK and Wen, that could get their chance in the next bull run.
At this point, DOGE and SHIB prices are only maintained thanks to positive comments on social media. Therefore, we take the controversial stance that these "dog" coins will likely have another bad year.
3. Once again, the Bitcoin market cannot be separated from Wall Street.
People have been saying for years that Bitcoin is not correlated with the traditional financial market. While this may prove true at different stages of the market cycle, the leading cryptocurrency will most likely maintain its ties to Wall Street. The reason is not far-fetched.
The newly launched Bitcoin ETFs bring the cryptocurrency to the forefront of traditional trading desks and everyday investors using brokerage platforms. Additionally, these funds trade within US trading hours, unlike Bitcoin spot markets which operate 24/7.
Therefore, market participants can expect 2024 to be the year when Bitcoin's ties to Wall Street become even stronger. Market indicators such as Bitcoin Gaps on CME and perhaps ETF inflows and outflows will play a major role in determining Bitcoin prices for the foreseeable future.
4. Another big flop on the horizon in the crypto space
Go beyond forecasts like Sei Cryptocurrency Price PredictionWe predict that another revolutionary failure will hit the cryptocurrency industry in 2024.
Terra Classic (LUNC), which used to be called โTerra,โ and TerraClassicUSD (USTC) were the worst cryptocurrencies of 2022. That same month, TerraClassicUSD was the fourth-largest stablecoin by market cap, and Terra Classic was the fourth-largest . digital currency by market capitalization. However, things quickly fell apart.
While most stablecoins use paper money to stay pegged to the US dollar, TerraClassicUSD uses an algorithm. Multiple buyers on the USTC broke this peg, opening the door to arbitrage and causing a chain reaction on the Terra stablecoin and Terra itself.
Shortly after this epic fail, we saw a fraud on the FTX cryptocurrency market. Less than a year after FTX filed for bankruptcy, Sam Bankman-Fried, the company's former CEO, was found guilty of seven counts of theft and conspiracy. At the sentencing hearing in late March, it became clear that the former FTX CEO could receive up to 110 years in prison.
Although at this point it seems that the cryptocurrency market's problems are behind us, the possibility of another major failure cannot be completely ruled out. The cryptocurrency space is still in its infancy, with major hacks, market manipulation, and other issues plaguing the industry.
Meanwhile, three of the industry's leading companies, namely Coinbase, Kraken, and Ripple, remain at loggerheads with the SEC. Any negative outcome in these court cases could have a lasting impact on the cryptocurrency industry and harm investors' portfolios in 2024.
Others think that Tether (USDT), the largest stablecoin by market cap, could fail if it ever stops being backed by the dollar. Despite Tether's best attempts to demonstrate that its stablecoin is fully backed, critics remain at the company's throat, leaving a slim chance that a Tether failure could be the "black swan" event of the cryptocurrencies in 2024.
Conclusion
The cryptocurrency market is off to a splendid start in 2024, with many major coins posting double-digit gains. However, amid the optimism, investors should remain alert to the possibility of a major market slip. This article outlines four controversial cryptocurrency predictions for 2024. While there is no guarantee that any of them will come to fruition, they are still very possible and worth keeping in mind.
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