VanEck 2024 Prediction: Bitcoin to Reach New All-Time High Next Year, Blockchain Games to Have a Million Daily Active Users, DeFi KYC

The well-known U.S. asset management company VanEck has released a report on its 2024 crypto industry predictions, which includes bold assumptions such as being bullish on Bitcoin halving cycles, predicting Binance losing its leading position, the emergence of blockchain games with millions of daily active users, and DeFi KYC becoming mainstream.

Bitcoin Bullish in 2024

The U.S. economic recession begins. The cooling of inflation makes the economy more vulnerable to shocks, prompting risk capital to flow into other assets. Both gold and Bitcoin prices have recently surged.

Additionally, the first Bitcoin spot ETF is set to arrive, with over $2.4 billion expected to flow into these assets in the first quarter of 2024.

The fourth Bitcoin halving will lead to a bullish market sentiment. Following the halving, Bitcoin prices are expected to hit a new all-time high in the fourth quarter of 2024, potentially driven by the U.S. presidential election and regulatory changes.

Ethereum Faces Challenges

VanEck believes that Ethereum will not surpass Bitcoin in 2024, although its performance is expected to outpace large tech stocks. However, Ethereum's market share will face challenges from more efficient blockchains.

Ethereum Layer2 to Capture Majority of Ethereum's Value

After the implementation of EIP-4844 proto-danksharding, Layer2 will significantly reduce gas fees, capturing most of Ethereum's and other EVM-compatible networks' funds and transaction volumes, locking in most users on Layer2.

Ethereum and Ordinals Drive NFTs to New Heights

NFT activity is expected to reach a new all-time high, driven by Ethereum and Bitcoin network Ordinals protocols, with the proportion of NFTs issued on Ethereum and Bitcoin networks expected to reach three to one by the end of next year.

However, there has been more controversy surrounding Ordinals protocols on the Bitcoin network, leading to greater uncertainty in future development.

Binance's Leading Position Comes to an End

With the end of sanctions, Binance will lose its position as the top centralized exchange, with competitors like OKX, Bybit, Coinbase, and Bitget vying for the lead.

Due to increasing regulatory influence, Coinbase's crypto futures daily trading volume may exceed $1 billion, gradually boosting Coinbase's competitiveness.

USDC Stablecoin Market Cap Set to Rebound

As the market recovers, the total market cap of stablecoins is expected to exceed $200 billion, currently standing at around $129 billion.

USDC is expected to see more adoption by institutions and services, especially in Layer2 networks, reversing recent market share losses and experiencing significant growth.

According to DefiLlama data, the stablecoin market competition as of today is as follows:

• USDT: $90 billion
• USDC: $23.6 billion
• DAI: $5.2 billion
• TUSD: $2.6 billion
• BUSD: $1.5 billion
• FDUSD: $1 billion

Decentralized Exchange Market Share to Reach New Highs

The market share of decentralized exchanges (DEX) is expected to rise to new highs, driven by high-performance blockchains like Solana and account abstraction technology, enhancing the user experience of on-chain products.

As of now, decentralized exchanges account for about 10% of centralized exchange trading volume, with a historical high of around 16%, stemming from the FTX exchange bankruptcy event.

Increased Demand for Cross-Border Remittances to Boost Blockchain Adoption

The demand for cross-border remittances will drive users to adopt blockchain technology. Bitcoin's Lightning Network's "liquidity pledge service" is gradually maturing, attracting larger-scale adoption.

Additional Note: Apart from technical developments, the current limitation of time locks on the Bitcoin Lightning Network requires tokens to remain on the network, causing a lack of liquidity and low usage.

Specialized liquidity-providing services are beginning to emerge for the Lightning Network, such as Stroom Network and Babylon Protocol, allowing liquidity providers to pledge Bitcoin and earn fees when transactions occur on the Lightning Network.

It is expected that this service will mature in 2024, leading to further adoption of the Lightning Network.

Chain Games Daily Active Players to Exceed One Million

With the release of high-budget games like Illuvium and Guild of Guardians in 2024, the future may see at least one truly groundbreaking blockchain game, with daily player numbers potentially surpassing one million.

IMX could become one of the top 25 tokens by market capitalization, currently ranked 42nd. Compared to other infrastructures, Immutable has developed several 3A games on its platform, which are genuinely engaging products, most of which have been in development for years, indicating significant potential for this ecosystem in 2024.

Solana to Become a Top Three Blockchain by Market Cap

Solana is expected to become one of the top three blockchains by market cap, TVL, and user count. The Solana ecosystem has recently shown many innovations, such as its high-speed MEV auction market Jito, innovative Pyth oracle mechanism, and high-performance client Firedancer, demonstrating the ecosystem's development and innovation capabilities.

DePIN Products Maturity Accelerates Market Adoption

The decentralized physical infrastructure network DePIN is expected to see wider adoption next year, with special anticipation for decentralized map Hivemapper and decentralized network Helium. The former's map content quality is steadily improving, while the latter's 5G mobile network has already begun commercial use in the U.S.

DePIN will rapidly expand, providing efficient alternatives to traditional infrastructure.

Traditional Financial Companies' Financial Statements Include Crypto Businesses

New accounting standards revisions will increase companies' holdings of crypto assets and compliance. Companies adopting the new FASB standards may promote information disclosure in the crypto industry and allow companies to value crypto assets at market value, increasing their willingness to hold crypto assets or venture into related businesses.

These accounting changes will take effect in 2025, but companies can adopt them earlier. Major financial entities may enter the industry by developing projects like L2 blockchains. It is expected that major financial institutions will continue to introduce services linked to public chains in the next two years.

Coinbase will become the first publicly listed company to disclose revenue from its own Layer 2 projects in its financial statements, with Base Protocol's annual revenue exceeding $100 million.

DeFi KYC Changing the Market Landscape

Uniswap v4's design offering users customizable Hooks has the potential for KYC transactions, boosting institutional liquidity and transaction volume for the protocol, allowing new users to transact without regulatory concerns.

For these reasons, VanEck believes that in the future, DeFi products led by Uniswap and meeting KYC requirements may surpass anonymous DApps.