I am happy to share my 5th yearly forecast on crypto — wait we call it Web3 now — with you. In hindsight, 2023 was a great year for the crypto space. The responsible for the FTX bankruptcy were brought in front of a court and found guilty setting another example that the crypto space is not lawless and that bad actors have to face consequences. Binance settled with the SEC for USD 4.3 billion, which was another positive news for the sector (even though the case with the SEC is not entirely done yet), as there were fears that Binance could result in a FTX 2.0. US courts told the SEC that it was wrong to reject Grayscale’s Bitcoin Spot ETF application and to review their decision again (and the SEC did not appeal). The Ethereum ecosystem successfully adapted to the “Merge” update of 2022, with more transactions on Layer 2 protocols (L2s) in 2023 than on Ethereum itself.

Opposed to last year’s crypto forecast we are not in a bear market anymore, so expect to see a lot of “AI Experts” change their LinkedIn bio back to “Web3 Experts” (my first prediction). At the time of writing this post, Bitcoin has rallied over 160% in 2023. Most experts believe in an approval of the first Bitcoin Spot ETFs in the US in early January, after years of rejection by the SEC, and the next Bitcoin Halving is scheduled for April of 2024 another usually bullish event. Also, the regulatory environment looks promising with the coming in effect of regulations such as MiCA in the EU, which will positively affect the markets.

As always I hope you enjoy reading this post and it helps you set the right focus for 2024.

Everything looks like we are heading to the next crypto bull market in 2024/2025. As stated in the introduction, Bitcoin already rallied 160% in 2023, and as in past cycles leads the bull market, the approval of the first Bitcoin Spot ETFs in the US is quite likely, which is expected to bring more institutional adoption, the next Bitcoin Halving is scheduled in April 2024 creating a supply shock, and many macroeconomic and regulatory developments are bullish. Therefore, I expect the next crypto bull market and new all-time highs for many tokens in 2024/2025. I would not be surprised to see Bitcoin’s price over USD 100k and Ether at least at USD 6k at one point. I still expect this even if the Bitcoin Spot ETFs are not approved in January, as it does not change crypto fundamentals. But this might be the last boom and bust crypto cycle, as we know from past cycles in 2017 and 2020, as the market matures and will become less volatile in the future. Let’s check in a year.

I expect the macroeconomic environment to be favorable for crypto assets and accelerate the bull market in 2024 and beyond. This especially as many experts expect an end of the interest rate hikes in the US for Q2 2024 which will make investments into risk assets such as crypto more attractive. Further, I can imagine seeing an end to the war in Ukraine in 2024, which will further positively affect markets in general (unless a new major conflict starts e.g. in Taiwan ofc). I also expect Donald Trump or another Republican candidate to win the US presidental elections, which will most likely be positive for the crypto market.

The next Bitcoin halving is scheduled for April 2024. After the halving, the reward for Bitcoin miners will halve (as the name suggests) from currently 6.25 BTC to 3.125 BTC per block. Fun fact: The first block reward in Bitcoin’s history was 50 Bitcoins on the 3rd of January 2009. This has historically been a bullish event, as the halving creates a supply shock as the number of newly issued Bitcoins halves miners receive from the protocol. While the demand for Bitcoin increases naturally pushing Bitcoin’s price higher. Even though there is no guarantee that history will repeat itself, I think the Bitcoin halving will have the same effect as in past crypto cycles and result in a bull market with new all time highs 6–9 months after the halving which would be in Q4 2024/Q1 2025.

Historically, Bitcoin has mainly been used for sending tokens from one wallet to another. While there have been some other use cases in the past, such as Colored Coins or calls to change its consensus mechanism to the environmentally friendly Proof-of-Stake (PoS), the Bitcoin community seemed to be opposed to changes to the protocol (especially the OGs) or other use cases as it could interfere with Bitcoin’s scalability or transaction processing capacity. But upcoming projects such as Stacks, which is bringing smart contracts programmability to Bitcoin, or the Ordinals protocol, which created a mini Bitcoin NFT-hype in 2023, may change this. While I do not expect to see a change in the consensus mechanism of Bitcoin anytime soon, I expect to see more projects such as Stacks, Rootstock, and Ordinals creating more use cases for Bitcoin and an increased number of BRC-20 tokens, which are the Bitcoin equivalent of Ethereum’s ERC-20 token standard (although with less functionality). With the advent and increased popularity of such projects, I would not be surprised to see a Bitcoin NFT hype and a Bitcoin “DeFi summer” in 2024.

This is more of a wild guess, but I expect history to repeat itself. Similar to the last bull market where El Salvador, as a state, bought Bitcoin, I expect other states to do the same in 2024/2025. One candidate I could imagine would be Argentina, with its newly elected president Javier Milei buying Bitcoin. Milei has made positive Bitcoin statements in the past and is also critical of the Central Bank of Argentina. Additionally, we could see, similar as in El Salvador, the annoucement of state-sponsored Bitcoin mining programs in Argentina and other states in South America, Southeast Asia and Eastern Europe in 2024.

While the current focus is (as in past early phase of the bull market) on Bitcoin, with a positive SEC Spot decision expected to come soon and the next Bitcoin halving scheduled for April 2024, we should not forget about Ethereum. The first smart contract platform and second largest token by market cap has multiple major protocol upgrades planned for next year, such as the EIP-4844 “Protodanksharding” upgrade. This will make Ethereum more scalable, reduce transaction costs, and increase the efficiency of the Layer 2 (L2) protocols built on Ethereum. Similarly, as with the “Merge” update in 2022, I expect all upgrades to go through smoothly and result in a better, more scalable, and usable Ethereum.

Multiple applications have been filed for Ethereum Spot ETFs in the US by major TradFi players such as VanEck, Ark Invest, and Grayscale. If Bitcoin Spot ETFs are approved, we can expect the same for Ethereum, making investment more accessible and more likely for institutional investors. Although many tokens exist, I expect to see institutional investors initially primarily invest in Bitcoin and Ethereum as both protocols have a strong track record and ecosystem others first need to catch up to. At the time of writing, the SEC has postponed the decision to approve Ethereum Spot ETFs to May 2024. If the decision does not come earlier, I expect a similar hype and price action around Ether in May 2024.

The last quarter of 2023 has shown that Solana is far from death and has already strongly rebounded. I expect this to continue in 2024, despite that the current Solana hype is partially driven by memecoins, which is not a sustainable driver. I believe we will see Solana as the third largest token by market cap in 2024 for three reasons: First, I believe many new investors who join the crypto space in this cycle will rather buy SOL than ETH because they expect more upside and the token price is psychological more attractive. Second, as an integrated blockchain Solana offers a better UI/UX, better scalabaility and transaction costs than modular blockchains such as Ethereum. There will be continued interest in integrated blockchains in 2024 with Solana being in the main focus. Third, due to the high TPS of Solana, various applications that would not be possible on other smart contract platforms can be launched there, creating a new ecosystem. This could differentiate Solana from all other smart contract platforms that copy paste Ethereum applications without creating their own use cases.

In my last year’s forecast, I predicted that there would be no Play-to-Earn (P2E) anymore in Web3 games as they were unsustainable and did not attract primarily gamers but people who wanted to earn money, as we saw with Axie Infinity. I have revised my view regarding P2E. There will still be P2E in Web3 games, but in a more sustainable way. There will be a shift from Play-to-Earn to Play-and-Earn, as coined by Arianna Simpson from a16z crypto in their 2024 forecast blog post. This means that the tokenomics of Web3 games will become more sustainable and will find the sweet spot to allow users to cash out on their in-game currencies and assets but in a way that playing the game still makes fun and gamers do not mostly interact with bots who are farming the tokens for profit.

We will see a lot of Web2.5 games in 2024, as I expect traditional gaming studios to increasingly adopt Web3 elements into their games. An approach that I like is allowing gamers to choose whether they want to interact with the Web3 elements, such as in-game assets represented as NFTs or not. Offering the same UI/UX of a traditional game with the option to interact with the Web3 elements is a great approach, as you do not force gamers to use it. Still, with time, they will realize the benefits of in-game asset ownership and decentralization. As with every technological change, we won’t see a shift immediately but a phase of transition from Web2 to Web3, especially as we are still in the early phases of Web3, so expect a lot of Web2.5 in many domains.

I already made the prediction of the launch of the first AAA Web3 game in my last year’s post, but it was too early, and I expect it to happen in 2024. While the first generation of Web3 games was very simple, some not being a lot more complex than Snake on an old Nokia, I expect the first AAA game, also called Blockbuster Game, to launch and get traction in 2024.

This is a bonus prediction that I should actually make for next year’s 2025 editions, but I want to have mentioned it already now. I believe Rockstar Games GTA VI, one of the most anticipated games in the world, will have Web3 elements in the game when it is released in 2025. While nothing has yet been communicated in this regard, I think we will see it happening. Especially as Rockstar Games is focusing a lot on the online gaming experience, we saw in the current game edition, it makes a lot of sense to integrate GameFi elements such as a marketplace for in-game assets represented as NFTs.

A sector I am very passionate and have written about in my past two forecast blogs is Web3 Social, which is also often called Decentralized Social (DeSoc). We already saw a mini hype in 2023 with friend.tech, and I expect to see more and more applications in Web3 Social getting traction in 2024. One of the largest platforms, Farcaster, went public/permissionless in Q4 2023 and is gaining good traction. Another major Web3 Social project, Lens Protocol by the Avara team, upgraded to its V2 in 2023, making it more scalable and adding many cool features, which I expect to go permissionless in the first half of 2024. With the end of the early experimentation phase of Farcaster and Lens Protocol and the launch of many more Web3 Social projects, I could see this sector as one of the main emerging ones in 2024. I further expect that many crypto projects will add those communication channels and interact with their communities there instead of Web2 Social platforms such as Twitter and Discord. Additionally, I expect to see more Social Finance (SocialFi) applications in 2024 that combine Web3 Social with DeFi, such as crowd investing platforms.

A trend we saw in 2023, which will continue in the new year, will be the increasing adoption of traditional finance (TradFi) players in crypto. This will range from custody, brokerage, lending, asset management, and tokenization of real-world assets (RWA). In Switzerland, multiple state-owned banks such as PostFinance, Zuger Kantonalbank, Luzerner Kantobalbank, and St.Galler Kantonalbank partnered with crypto service providers to offer their clients access to crypto custody and brokerage services. The same trend could be observed in many other countries and will continue in 2024 and beyond. As nearly every significant TradFi player has a digital assets team, we will see more and more of them offering initially basic crypto services in 2024 and more sophisticated following them. I would not be surprised to see Switzerland’s largest bank, UBS, offering basic crypto services in 2024/2025.

I expect a second NFT hype as we had in the last bull market, with many prominent NFT collections such as CryptoPunks and BAYC rallying again. As stated in the Bitcoin prediction section, I can also imagine seeing a Bitcoin NFT hype with the emergence of BRC-20 tokens. I would not be suprised to see more NFT activity on Bitcoin and Solana than on EVM chains in 2024. Besides this, we will see more traction in NFT usage beyond collectibles, such as for credentials, music, loyalty points, and brand assets. Also, in the domain of “phygital”, connecting the physical with the digital world, NFTs will play an essential role in use cases such as product authentication.

2024 will also be the year of many major airdrops. Some of the largest projects have hold on their airdrop in 2023 as markets were not favorable and with the market sentiment changing from bearish to bullish it can expected that there will be a great year for early users and airdrop hunters in 2024. Notable projects where we can expect an airdrop are zkSync, Starknet, Scroll, Lens Protocol, and LayerZero. We could also see an airdrop from MetaMask (it’s about time).

In 2023, AI took much of the spotlight away from crypto. But AI and crypto are not competitors, and the two technologies can integrate well with each other and should. There are already quite some crypto projects that use AI, some more for marketing and some really. For 2024 and beyond, I expect to see more crypto projects leveraging AI, especially in analytics and data verification. Blockchain technology could be a key technology to make AI data more reliable and trustworthy and be a solution to confirm the integrity of data, which could be easily faked with AI.

Web3 applications offer notoriously bad UI/UX in mobile applications. Just use Metamask on your mobile, and you will know what I mean. In 2024, we will see more Web3 mobile applications going live that offer their users a great UI/UX. Some examples of apps I really enjoyed using in 2023 are Orb, Phaver, and Converse. This will be essential to push the mass adoption of Web3 further. Especially in Web3 gaming and social, there will be a lot of mobile development as those applications are primarily used on mobile. But I also expect to see the launch of DeFi mobile apps.

Currently, there is not much hype around the metaverse or metaverse tokens as the market’s focus lies more on Web3 gaming, social, and infrastructure projects. I expect this to change again in 2024 with the launch of the Apple Vision Pro and other XR devices from different producers, which are becoming cheaper and cheaper and more attractive to buy for the mainstream besides the tech nerds currently using them. The hype around the Apple Vision Pro will shift to many Web3 projects focusing on the metaverse. Also, with the advent of AI and developments in the NFT space, I see a bright future for metaverse projects, even if we don’t see projects with millions of users yet in the next year.

I hope you have enjoyed reading this year`s forecast. See you next year!

PS: The attentive reader of my yearly forecasts may have noticed it. I have used Bitcoin again for the cover picture of this post as in 2021, even though I usually use a different token every year. There are two reasons: First, Bitcoin will dominate the crypto space in 2024 with the Spot ETFs applications and next halving. Second, I am an ETH maxi, so this is a good excuse not to have Solana as the cover token for this year. Sorry, Anatoly!