4 Bitcoin Catalysts That Will Shape the Crypto Market in 2024

4 Bitcoin Catalysts That Will Shape the Crypto Market in 2024

Bitcoin, the world’s leading cryptocurrency, has been on a remarkable rally since late 2023, reaching new highs and attracting widespread attention.

But what are the main factors driving its price and performance in 2024?

In this article, intergovernmental blockchain expert Anndy Lian will explore four potential catalysts that could have a significant impact on Bitcoin’s future — the impact of spot BTC exchange-traded funds (ETFs), the upcoming Bitcoin halving, the June quarterly expiry of Bitcoin options and futures, and the U.S. presidential election.

Spot Bitcoin ETFs: A Game Changer for the Industry?

One of the most anticipated events in the crypto space was the launch of spot Bitcoin ETFs in the US, which began trading in January 2024. These are financial products that track the price of Bitcoin and allow investors to buy and sell shares through their existing brokerage accounts without having to deal with the complexities and risks of directly holding or storing the cryptocurrency.

The approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) is seen as a major regulatory breakthrough and a validation of Bitcoin as a legitimate asset class. It is also expected to attract more institutional and retail investors into the crypto market, increasing the demand and liquidity for Bitcoin. As of the middle of March 2024, nine Bitcoin ETFs hold nearly half a million BTC.

Not everyone is optimistic about the impact of spot Bitcoin ETFs on the crypto industry. Some critics argue that these products could introduce more volatility and manipulation into the market, as well as undermine the decentralized and peer-to-peer nature of Bitcoin. Moreover, some investors may prefer to hold Bitcoin directly rather than through a third-party intermediary to enjoy the full benefits of its security, privacy, and resistance to censorship.

Bitcoin Halving: A Supply Shock or a Non-Event?

Another key event that could affect Bitcoin’s price and performance in 2024 is the Bitcoin halving, which is expected to occur next month. This is a pre-programmed adjustment to the Bitcoin protocol that reduces the amount of new Bitcoins generated per block by 50%, from 6.25 to 3.125 Bitcoins. This means that the annual inflation rate of Bitcoin will drop from about 1.8% to 0.9%, making it scarcer and more valuable.

Historically, each halving event has coincided with the beginning of a bull market for Bitcoin, as the supply reduction creates a supply-demand imbalance that drives the price up. For instance, the first halving in 2012 was followed by a 9,000% increase in Bitcoin’s price over the next year, while the second halving in 2016 was followed by a 2,800% increase over the next 18 months. The third halving in 2020 was followed by a 400% increase over the next 12 months.

Some analysts caution that the halving effect may not be as strong or predictable as in the past, as the market has become more mature and efficient, and the halving is already priced in by the rational expectations of investors. Moreover, the halving may not have a direct causal relationship with the price movements, as other factors, such as macroeconomic developments, regulatory changes, and technological innovations, may also play a role. Therefore, the halving may not necessarily trigger a new bull run but rather confirm an existing trend.

June Quarterly Expiry: A Volatility Spike or a Smooth Transition?

Another factor that could influence Bitcoin’s price and performance in 2024 is the June quarterly expiry of Bitcoin options and futures, which is scheduled for June 21, 2024. This is the date when a large number of contracts that give investors the right or obligation to buy or sell Bitcoin at a predetermined price and date expire and settle.

The expiry of these contracts could have a significant impact on the market, as investors may adjust their positions or exercise their options before or on the expiry date, creating large buy or sell orders that could move the price. Moreover, the expiry could also affect the implied volatility of Bitcoin, which is a measure of how much the market expects the price to fluctuate in the future. A high implied volatility means that the market anticipates large price movements, while a low implied volatility means that the market expects stable price movements.

Some analysts expect that the June quarterly expiry could cause a spike in volatility, as the market may experience increased uncertainty and speculation ahead of the event. This could create opportunities for traders to profit from the price swings but also pose risks for investors who are not prepared for the potential price shocks.

On the other hand, some analysts believe that the June quarterly expiry could be a smooth transition, as the market may have already priced in the event and adjusted its positions accordingly. This could result in a calm and orderly market with minimal impact on the price and volatility.

US Presidential Election: A Bullish or a Bearish Scenario?

The final event that could have a significant impact on Bitcoin’s price and performance in 2024 is the U.S. presidential election, which will take place on November 5, 2024. The election will determine the next president and vice president of the United States, as well as the composition of the Congress and the state governments. The outcome of the election could have major implications for the U.S. and global economy, the geopolitical landscape, and the regulatory environment for the crypto industry.

The main contenders for the presidency are the incumbent Democrat Joe Biden, who is running for re-election, and the former Republican Donald Trump, who is running for a second, non-consecutive term. Both candidates have different views and policies on various issues, such as taxation, trade, health care, immigration, foreign affairs, and climate change, that could affect economic growth, inflation, interest rates, and market sentiment in the U.S. and abroad.

The election could also have a direct impact on the crypto industry, as both candidates have different stances and approaches to the regulation and innovation of the crypto space. Biden has been generally supportive of the crypto industry, in my opinion, as he has expressed interest in exploring the potential of a central bank digital currency (CBDC) and fostering the development of blockchain technology.

Trump, on the other hand, has been generally hostile to the crypto industry, as he has repeatedly criticized Bitcoin and other cryptocurrencies, calling them a “scam” and a “threat” to the U.S. dollar. He has also imposed sanctions and restrictions on several countries and entities that are involved in the crypto space.

He has also expressed skepticism and opposition to the idea of a CBDC and the innovation of blockchain. However, things may be turning for Trump, who is now appearing to be warming towards Bitcoin in a recent article, saying that some regulation was likely required, but many people are embracing it, and he could “live with it one way or the other.”

The Bottom Line

Bitcoin, the world’s leading cryptocurrency, has a lot of potential catalysts that could affect its price and performance in 2024. These include spot Bitcoin ETFs, the upcoming Bitcoin halving, the June quarterly expiry of Bitcoin options and futures, and the U.S. presidential election. Each of these events could have positive or negative implications for the crypto industry, depending on how they unfold and how the market reacts.

Therefore, investors and traders should be aware of these events and their possible outcomes and be prepared for the opportunities and challenges that they may bring.

Nevertheless, Bitcoin has reached a new all-time high of over $73,000. I am still very positive about its outcome for this year.

Let’s see.

 

Source: https://www.techopedia.com/4-bitcoin-catalysts-that-will-shape-the-crypto-market-in-2024

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Public Market- Where are the biggest institutional opportunities?- Digital Assets: Realised – Hong Kong

Public Market- Where are the biggest institutional opportunities?- Digital Assets: Realised – Hong Kong

Public Markets – Where are the Biggest Institutional Opportunities? ETF, Mutual Funds, Stocks, Bonds

– Moderator: Julien Bahurel, Partner, Deep Blue/Definer Fund
– Anndy Lian, Senior Advisor, Peach Income Fund
– Tony Wong, Managing Director, CSOP Asset Management
– Nicholas Studholme Wilson, Chief Operating Officer – Asia, GFO-X

At the panel discussion, industry experts gathered to explore the transformative potential of tokenization in asset classes and the future of financial markets. The conversation, moderated by Julian, delved into the implications of digitizing assets and the infrastructure required to support this evolution.

Julian opened the panel by highlighting the significance of functional markets, which are valued at approximately 4 trillion dollars. The focus then shifted to the opportunities presented by liquid markets through tokenization or digitization.

Tony discussed the enormous opportunities within the crypto space, particularly in Asia, where a significant portion of crypto trading activity originates. He emphasized the institutional interest in crypto markets, especially following price openings, and the inquiries from traditional managers and private bankers about accessing these new asset classes with appropriate risk levels. He pointed out that mutual funds might be the first asset class to adopt tokenization, revolutionizing the distribution landscape. He envisioned mutual funds being traded on exchanges like any other asset, within regulatory frameworks, making them accessible 24/7.

Anndy concurred with Tony’s views on mutual funds. He described tokenizing them as a “piece of cake” and predicted a substantial uptake, particularly in Hong Kong, which could become a significant player in the Asian market. Anndy also touched upon the role of exchanges like NASDAQ in a blockchain-dominated world, speculating that traditional exchanges might adapt to offer 24/7 services using blockchain technology.

Nicholas shared his perspective on achieving the end goal of a fully tokenized state on multiple chains. He stressed the importance of starting with existing infrastructure to generate revenue before transitioning to more advanced systems. Nicholas also discussed the challenges of latency and privacy considerations, suggesting that permissioned chains might be a necessary starting point before moving to public chains.

The panelists debated the coexistence of traditional liquid markets with tokenized markets, agreeing that while they may initially coexist, the superior efficiency of tokenized systems would eventually lead to a transition.

The conversation also touched on the regulatory implications of tokenization. While the technology offers exciting possibilities, it also presents challenges for regulators who must adapt to a rapidly evolving landscape.

As the discussion concluded, the panelists expressed optimism about the future of tokenized markets. They envisioned a world where traditional and tokenized markets coexist and eventually converge, thanks to improved infrastructure and broader acceptance of blockchain technology.

The panel’s insights suggest that while the journey toward widespread tokenization is still in its early stages, the destination promises a more inclusive and efficient market for all participants. As the technology matures and regulatory frameworks evolve, we may witness a significant shift in how assets are traded and managed globally.

Digital Assets: Realised held in Hong Kong on 7 March 2024. The event brought traditional funding, listing players, and new digital exchange and platform opportunities.

 

Source: https://blockcast.cc/videos/public-market-where-are-the-biggest-institutional-opportunities-digital-assets-realised/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Anndy Lian: South Korea’s New Crypto Rules Bring Market Stability

Anndy Lian: South Korea’s New Crypto Rules Bring Market Stability

South Korea is a significant player in cryptocurrency and blockchain adoption — and has a regulatory framework that recognizes this.

One development on this journey is the Virtual Asset User Protection Act, representing South Korea’s first formal attempt to establish legal guidelines for the management and oversight of virtual assets, including cryptocurrencies.

In essence, the Virtual Asset User Protection Act defines virtual assets as digital representations of value that can be electronically traded or transferred and grants authority to the Financial Services Commission (FSC), the primary financial regulator in South Korea, to supervise and regulate the crypto sector effectively.

The regulations, scheduled to take effect on July 19, 2024, are designed to protect user assets and interests, prevent misuse and abuse, enhance transparency and accountability, and promote innovation and development, and we took a closer look during the proposal stage.

We sit down with intergovernmental blockchain expert Anndy Lian for a nuanced take on the new regulations.

Key Takeaways

  • The Virtual Asset User Protection Act marks South Korea’s first formal attempt to establish legal guidelines for managing and overseeing virtual assets, including cryptocurrencies.
  • The regulations take effect on July 19, 2024, aimed at protecting user assets and interests, enhancing transparency and accountability, and promoting innovation and development.
  • They are expected to have significant implications for both South Korea’s virtual asset market and those abroad — but may pose challenges for teams complying with the strict regulatory standards.
  • There is room for future developments, such as smart contract-based services like DeFi, Decentralized Autonomous Organizations (DAOs), and Web3.

Impact of South Korea’s Crypto Regulations

Q: How is the Virtual Asset User Protection Act applied internationally, and what impact could it have on virtual asset service providers outside of Korea?

A: The Act is going to have a significant impact on the virtual asset industry, both in South Korea and abroad.

The primary function of the Act is to protect the South Korean market and its users. I think it fits the purpose.

On one hand, it may enhance the credibility and legitimacy of the virtual asset market, as well as the protection and security of users.

On the other hand, it may also pose challenges and costs for VASPs [virtual asset service providers] to meet the strict regulatory standards and requirements — some VASPs may decide to exit the South Korean market or restrict their services to South Korean users, while others may seek to adapt and innovate to comply with the law.

If you look deeper into the Act, I think it is fair for everyone — this is very similar to traditional finance.

Q: Regarding financial investment services and the Capital Markets Act (FSCMA), could you explain the changes brought about by the Token Security Guidelines? What are the potential implications of these changes on the virtual asset market?

A: The implications of these guidelines are significant for the virtual asset market, as they will enable the issuance and circulation of security tokens within the legal boundaries of the capital market regulations.

This will facilitate the creation and trading of new and diverse rights, such as fractional shares, in the form of security tokens. It will also foster the development of small-scale OTC markets where atypical types of securities can be exchanged.

Moreover, the guidelines will ensure the protection of investors and the maintenance of market order, as security tokens will be subject to the same rules and regulations as traditional securities, such as mandatory disclosure, authorization, and prohibition of unfair trading activities.

I think this is a positive and progressive move by the South Korean authorities, as it will promote innovation and inclusion in the virtual asset market while safeguarding the participants’ interests. I hope other countries will follow suit and adopt similar regulatory frameworks for security tokens.

Strengths and Challenges of South Korea’s Rules

Q: How does the Digital Asset Framework Bill specifically regulate virtual/digital assets, and what are its advantages and challenges?

A: The advantages of this bill are manifold.

First, it will create a more transparent and predictable legal environment for the development and innovation of virtual/digital assets, which will attract more investment and participation from domestic and foreign entities.

Second, it will enhance the credibility and legitimacy of the virtual/digital asset market, which will increase the public trust and acceptance of these new forms of value and exchange.

Third, it will foster the integration and interoperability of virtual/digital assets with the existing financial system, which will enable more efficient and convenient transactions and services for users and businesses.

Fourth, it will contribute to the global leadership and cooperation of South Korea in the virtual/digital asset space, as it will align with the international standards and best practices set by organizations such as the Financial Action Task Force (FATF) and the G2014.

Q: And the challenges…?

A: First, it will require a careful and balanced approach to ensure that the regulation does not stifle the innovation and diversity of the virtual/digital asset market, which is constantly evolving and expanding.

Second, it will demand a high level of coordination and collaboration among various stakeholders, such as regulators, legislators, industry players, experts, and users, to ensure that the bill reflects the needs and interests of all parties involved.

Third, it will entail a continuous monitoring and evaluation of the impact and effectiveness of the regulation, as well as a timely and flexible adjustment of the rules and standards to cope with the rapid changes and challenges in the virtual/digital asset market.

I think this is a very important and timely initiative by the South Korean government, as it will provide a solid foundation and direction for the future of the virtual/digital asset market, which has a huge potential and value for society and the economy.

South Korea’s Digital Future

Q: How will the Virtual Asset User Protection Act contribute to market stability and investor protection? In your view, could it enhance the stability and transparency of the virtual asset market?

A: The Act will also establish a set of rules that virtual asset service providers (VASPs) are required to follow to ensure the protection of users’ assets, such as separating customers’ funds and virtual assets from their own, storing a certain proportion of virtual assets in cold wallets, having insurance or reserves for liability, and maintaining transaction records.

Moreover, the Act will confer the market oversight and sanctions authority to the Financial Services Commission (FSC), which will be able to punish unfair trading activities using virtual assets, such as insider trading, market manipulation, and fraud, with criminal penalties and fines.

I think it brings market stability and provides investor protection in several ways.

First, it will create a more transparent and predictable legal environment for the development and innovation of virtual assets, which will reduce uncertainty and risk for investors and users.

Second, it will enhance the credibility and legitimacy of the virtual asset market, which will increase public trust and confidence in these new forms of value and exchange.

Third, it will foster the integration and interoperability of virtual assets with the existing financial system, which will enable more efficient and convenient transactions and services for users and businesses.

Fourth, it will ensure the protection of users’ rights and interests, as well as the maintenance of market order, by imposing strict standards and obligations on VASPs and enforcing sanctions on violators.

Q: The Financial Services Commission excluded deposit tokens linked to NFTs, electronic bonds, mobile gift certificates, and CBDCs from the law. What do you think are the reasons behind this decision? In your view, does this effectively prevent virtual asset-related crimes?

A: In my view, excluding these types of tokens from the law does not necessarily prevent virtual asset-related crimes but rather clarifies the scope and applicability of the law to the relevant types of tokens that could pose potential risks or challenges to the financial system or the users.

The exclusion is very obvious as it overlaps with existing laws.

For a few examples, electronic bonds are tokens that represent the debt obligations of an issuer, such as a government or a corporation, to pay a fixed amount of interest and principal to the holders of the bonds.

These tokens are not considered virtual assets under the law because they are already regulated as securities under the existing capital market regulations and do not pose any additional risks or challenges to the financial system.

CBDC is a digital form of fiat currency issued by a central bank, which can be used as a legal tender for payments and settlements. CBDC is not considered as a virtual asset under the law, because it is a direct liability of the central bank, and does not involve any intermediaries or third parties that could pose any operational or security risks.

What Needs to Happen Next?

Q: There’s an opinion suggesting that while the Virtual Asset User Protection Act focuses mainly on asset segregation and unfair trading activities of virtual asset service providers, regulations on smart contract-based services such as DeFi, Decentralized Autonomous Organizations, and Web3 are inadequate.

How do you perceive this? What alternative methods do you see for the upcoming laws to provide more comprehensive regulations aimed at preventing user harm?

A: Personally, I think the current regulations are sufficient for the time being. We must understand that we are dealing with innovation, which changes very fast.

Putting up a base and having backup correction plans along the journey would be a more protective method for the South Korean market.

I think the best way to approach this issue is to adopt a balanced and flexible perspective that considers both the benefits and drawbacks of smart contract-based services and seeks to find a middle ground between regulation and innovation. Some possible alternative methods for the upcoming laws to provide more comprehensive regulations are:

  • Establishing clear and consistent standards and definitions for different types of smart contract-based services, such as decentralized finance (DeFi), DAOs, and Web3, and applying appropriate rules and requirements for each category.
  • Creating a sandbox or pilot program that allows for testing and experimenting with new and innovative smart contract services under certain conditions and exemptions and with regular monitoring and evaluation.
  • Encouraging collaboration and communication between regulators, developers, users, and other stakeholders to foster mutual understanding, trust, and feedback and to promote best practices and self-regulation.
  • Adopting a principles-based and risk-based approach that focuses on the outcomes and impacts of smart contract-based services rather than the specific processes and mechanisms and that applies proportional and tailored measures according to the level and nature of risk involved.

 

Source: https://www.techopedia.com/anndy-lian-south-koreas-new-crypto-rules-bring-market-stability

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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