- The CEO of Messari has prepared a report for 2023 and forecasts for the crypto market for 2024.
- He believes that in the future, Bitcoin can overcome the $600,000 mark, as its parity with gold will increase.
- Ryan Selkis also noted a shift in the rhetoric of legislators, pointed to signs of CeFi’s recovery, spoke about the growing dominance of L2 solutions and made some personal recommendations.
Messari has published a comprehensive forecast for the crypto market for 2024. The report highlights the main events of 2023 and possible trends for 2024. Among the latest: retail central bank digital currencies (CBDCs), stablecoins, “consumer” applications and, of course, Bitcoin.
Briefly about the main thing
The key message from Messari CEO Ryan Selkis and the report’s author regarding the state of the industry in 2024 is that it will become more resilient as digital assets demonstrate their “usefulness” in advanced technologies.
Briefly, Messari’s forecast can be divided into the following theses:
- the industry will become more politicized. Market participants must understand that regulators in the US and around the world have enormous weight and can directly influence certain aspects of the industry, as well as individual counterparties;
- the focus will be on Bitcoin, stablecoins (in particular algorithmic ones) and CBDC;
- the CeFi sector will regain its leading position in the market. The author also noted the high potential of institutional cryptocurrency products;
- there will be competition between L1 solutions. Ethereum will likely lose its status as a technology flagship;
- The DeFi sector will become more regulated. This will begin a gradual technological upgrade that will take several years;
- boom of “consumer” applications with blockchain solutions;
- formation of parallel hardware infrastructure;
- rapid growth of applications developed in a bear market. In particular, the expert separately noted Project Guardian from JPMorgan Chase bank and regulators.
These are just some of Selkis’ predictions for 2024. Next, we will take a closer look at the most important points of the report.
Bitcoin
“While it is difficult to predict how it will trade in the short term, its future value is virtually certain,” the report said.
According to Selkis, the main thesis in this case is quite simple – everything is moving to digital form.. Bitcoin remains a stable solution in conditions of economic uncertainty, he emphasized.
As confirmation, the author provided a chart of the MVRV indicator (comparison of the current and realized market value of the asset). An indicator value above 3 corresponds to a local peak. Moreover, from October to December 2023, it increased from 1.3 to 2.05, according to Glassnode:
Bitcoin BTCHowever, according to the expert, there is still room for long-term consolidation in the market. This is indicated by the asset dominance indicator.
The report indicates that in 2017, the share of Bitcoin decreased from 87% to 37%. In 2021, the rate recovered to 70%, but then fell back to 38% at the peak of the bubble.
At the time of writing, the figure reached 53.4%. A new round of the upward trend is easy to read on the chart, however, as the author noted, there is room for consolidation:
Bitcoin dominance index in the crypto-asset market. Source: TradingViewAccording to Selkis, the figure will reach 60% at the peak of the ETF rally.. At the same time, the risk of nominal and relative price decline is extremely low, the report says.. And it is Bitcoin that will be at the head of the new “bullish” cycle.
Artem Galunov“Parity with gold will ultimately ensure a price jump to $600,000. And this is not the ceiling,” the expert notes.
Ethereum
This market is in a “straddle” stage, the author believes. The report found that Bitcoin is outperforming Ethereum due to institutional investors’ desire for “clean play.”
At the same time, the ecosystem is in a vulnerable position because, over time, L2 and L3 solutions will surpass it in technical terms.
Ivan BabiukThe report emphasizes that there is currently no scenario in which Ethereum will surpass Bitcoin. However, the expert also recognizes its potential, since the asset has long dominated its environment.
The author compared the confrontation between Ethereum and Solana with the competition between Visa and Mastercard.
Ivan BabiukHighly liquid markets
The report highlights that Bitcoin, Ethereum and dollar stablecoins control a 75% share of the crypto asset market capitalization. These are a kind of “blue chips”, solid investments that are effective both in the short and long term, the expert believes.
Andrew MakarovHowever, he also emphasizes the high potential of the “other 25%”. As an example, the report cites the situation on the stock market.
According to the expert, of the 26,000 stocks traded since 1926, only 86 positions accounted for half of the subsequent growth. However, only a small part of the leaders of that time have survived.
Most ETF issuers are ignoring this trend by betting on Bitcoin and Ethereum:
Structure of popular exchange crypto indices. Source: Messari report.Winners in the cryptocurrency “war” of attrition
The author includes three counterparties in this category: the Coinbase exchange, as well as the companies Circle and Galaxy Digital. In 2024, the former is highly likely to maintain its position in the United States and increase its influence in foreign markets.
Selkis also mentioned Galaxy Digital’s preparation for an IPO in the US. We wrote about this earlier. At the same time, he considers it unlikely that one of the crypto companies will enter the stock market before the end of the presidential elections in America.
AI sector
“In an era of digital abundance and generative AI, technologies that enable reliable, global, and mathematically guaranteed provenance and scarcity of digital data will be critical,” the report states.
At the same time, cryptoassets, according to the expert, will become invaluable for time marking and verification of both devices and information. The report highlights the close relationship between the two sectors and its further development.
Maryna HlaiborodaTop People to Watch in 2024
The report provides an extensive list with detailed descriptions of each item. In this article we will reflect it briefly, in the form of abstracts:
- BlackRock CEO Lawrence Fink and Ark Invest CEO Cathie Wood. The choice in favor of these two candidates is due to the fact that Ark Invest was the first to apply for a spot Bitcoin ETF, while BlackRock made this direction one of the main trends of 2023;
- Circle CEO Jeremy Allaire and CSO Dante Disparte. According to experts, this organization is the first candidate for an IPO in 2024, and that says it all;
- head of the US Blockchain Association Christine Smith and executive director of the Fairshake super-committee Michael Carcase. It was the latter who raised $78 million from large crypto companies to support individual political candidates in the 2024 Congressional elections;
- Senator Elizabeth Warren and her “minions”. This is the main crypto-skeptic in the US Senate. Warren is best known for her AML bill, which we talked about earlier;
- Elon Musk. Selkis considers the billionaire one of the main “iconoclasts” in support of the cryptocurrency industry in 2023. He called Musk’s purchase of the social network Twitter (now X) the most important counterattack to the state’s policy of suppressing freedom of speech;
- Grayscale Investments CEO Michael Sonnenschein and company CLO Craig Salm. The company won a landslide victory in its lawsuit against the US Securities and Exchange Commission;
- Castle Island Ventures co-founders Nick Carter and Matthew Walsh. They were noted primarily for “compelling articles and forecasts,” including in defense of Bitcoin;
- Co-founder of the Centrifuge and Taulia projects Lucas Vogelsang, head of the Stellar Development Foundation Denelle Dixon and head of digital assets at Apollo Global Management Christine Moy;
- co-founder of the Farcaster project Dan Romero and co-founder of the SocialFi platform friend.tech under the pseudonym 0xRacer.
Also mentioned in the list is a group of developers and project teams in the DeFi sector.
Products to watch in 2024
Another fairly extensive list, which includes both individual tokens and applications, as well as entire projects.
The list can be briefly described as follows:
- USDT. For the first time in history, the capitalization of the asset exceeded the $90 billion mark in 2023. The expert pointed to the high potential for its growth as the ecosystem further develops. More details directly about the token in our material;
- Base. Blockchain from the Coinbase exchange. More details in a separate article;
- modular blockchain Celestia. The main network launched in early November 2023;
- new Solana validator client called Firedancer. It aims to reduce transaction costs and increase network throughput;
- social platform based on the decentralized Farcaster protocol;
- GBTC trust from Grayscale Investments. Let us remind you that, against the backdrop of the company’s victory in court, the product’s discount zone decreased to a multi-year minimum;
- Lido Finance liquid staking protocol. We previously reported that its total locked value reached a new all-time high;
- Chainlink CCIP Interconnection Project. The idea was presented back in 2022. Read more about this at the link;
- 3B – projects Blur, Blend and Blast;
- Project Guardian. This is a comprehensive program to assess the prospects for tokenization of assets and DeFi instruments by the authorities of Singapore and Japan in collaboration with JP Morgan Chase.
Assets to watch in 2024
In this section, the author has collected those crypto assets that, to one degree or another, will set the general tone in the market in the following months:
- bitcoin. The report pays special attention to it. The possible approval of spot Bitcoin ETFs, the upcoming halving and the recent rally make it the most anticipated contender for a meteoric rise in 2024;
- privacy tokens. This includes, for example, the anonymous currency zCash;
- stablecoins. Separately, the report identified two categories of these coins – algorithmic and those tied to bonds. More details about stablecoins in a separate article;
- CBDC and “other memecoins”. This is particularly the case for retail digital currencies, which Selkis compared to tokens such as DOGE and PEPE due to having little real-world impact on the industry.
“Consumer” markets
In this category, Selkis included blockchain products and applications aimed at the mass user. In particular, the following positions are highlighted separately:
- friend.tech. The project started along with the launch of the Base main network. This is a SocialFi project based on a decentralized protocol. More details about it in a separate article. The developers promise to present a new version of the platform in 2024;
- NFT marketplaces. The report notes that the correction in the non-fungible token market in 2023 was expected, but its pace exceeded estimates. However, the author also highlighted signs of recovery in the segment;
- Ordinals and NFT collections powered by generative AI. There is an extensive article on Bitcoin NFTs on the Incrypted website. As for neural networks and the issuance of tokens with their help, our editors even conducted an experiment on this topic. You can view it at the link;
- GameFi and other blockchain games. The report states that this is a sector with huge potential as it has a ready-made consumer base;
- identification protocols and token-linked accounts;
- modeling of digital autonomous worlds;
- rates. The Polymarket platform especially stands out in this category. Previously, we talked about how users of this resource staged a betting around the sunken bastikaf Titan, a possible nuclear war and the failed battle between Elon Musk and the head of Meta, Mark Zuckerberg;
- network states.
Other topics
The report also details Selkis’ forecasts in the following areas:
- changes in the political field. In particular, the report highlights that the overall tone of legislators has changed dramatically since 2022. However, the expert is sure that there will be no serious shocks for the industry, since this requires prompt joint work of both parties of the US Congress;
- CeFi and DeFi. The author noted that both sectors survived the crypto winter with certain transformation processes. CeFi will gradually recover by becoming more “transparent and accountable,” the report says;
- changes at L1 level. The popularity of L0, L2 and L3 solutions will only grow. There will be structural changes in the industry, Selkis said.
A few recommendations personally from the author
In this section, Selkis noted that he is often asked how he finds time to report while running a huge company. According to him, it is a way to cope with chaos in an ever-changing, dynamic world.
He also gave some other advice:
- You shouldn’t chase popularity. As an example, he cited the former head of the FTX exchange Sam Bankman-Fried and the ex-head of the Binance platform Changpeng Zhao;
- need to read more and turn off notifications in X (formerly Twitter);
- monitor productivity;
- Enjoying life.