The cryptocurrency market had a stellar 2023, with the total value of all assets rising a whooping 115% year to date. Bitcoin (BTC) and Ethereum did the majority of the heavy lifting, even though there are millions of cryptocurrencies available.
For the records, Bitcoin and Ethereum held a combined 58% of the $795 billion cryptocurrency market capitalization at the end of 2022. However, of the $1.71 trillion cryptocurrency market value as of December 28, 2023, 67% came from these two titans.
With that backdrop in mind, it is more important to consider where digital currencies are going forward than their past whereabouts. Here are four controversial cryptocurrency predictions for 2024 following an incredibly prosperous year.
Controversial Cryptocurrency Predictions for 2024
The cryptocurrency market has gotten the year to a fine start. 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 for why Bitcoin increased in value by over 160% in 2023. This includes the expectation of Bitcoin’s “halving” event, which is anticipated to take place in April 2024, the optimism felt throughout major U.S. financial markets, and the hope that the Securities and Exchange Commission (SEC) would approve a spot Bitcoin exchange-traded fund (ETF) in January.
Understandably, the crypto market witnessed a sharp sell-off after the SEC approved the spot Bitcoin ETFs. Bitcoin dropped as low as $38,500 within a few days, a price mark that has now become its most recent low.
In keeping with the trend, market participants can expect more “buy the rumor, sell the news” events on Bitcoin’s price this year. For instance, the market will most likely peak in the buildup to Bitcoin’s upcoming halving. Another peak might be expected if the U.S.-based funds secure approval for an Ethereum-based ETF.
Savvy investors may choose to time their selling of cryptocurrencies around these key milestones, with the opportunity to buy back later after the “sell the news” events described earlier.
2. Dogecoin will continue to underperform
It is most likely that very famous “dog” coins, like Dogecoin (DOGE) and Shiba Inu (SHIB ), will keep losing value compared to the whole crypto market. The value of Dogecoin and Shiba Inu tokens went up 35% and 36%, respectively, in 2023. Even though this is a better year-to-date return than the S&P 500, it’s still a long way below Bitcoin’s gain of 160% or more.
The main issue with Dogecoin and Shiba Inu is they are simply meme-based cryptocurrencies. While strong communities have emerged around them, it is hard to imagine a rally similar to the 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 must be quick to lower their expectations. After all, there are now thousands of other meme-based cryptocurrencies, notably including BONK and Wen, which might get their chance in the upcoming bull run.
At this point, the prices of DOGE and SHIB are only held up by positive comments on social media. Hence, we take the controversial stance that these “dog” coins will likely have another bad year.
3. Once again, the Bitcoin market can’t separate itself from Wall Street
People have said for years that Bitcoin is uncorrelated with the traditional financial market. While this may prove true for 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 front of traditional trading desks and everyday investors using brokerage platforms. Additionally, these funds trade within the U.S. trading hours, unlike spot Bitcoin markets, which are 24/7.
Hence, market participants can expect 2024 to be the year that Bitcoin’s ties with Wall Street get even stronger. Market indicators such as CME Bitcoin Gaps and perhaps inflows and outflows from the ETFs will play a major role in determining Bitcoin’s prices for the foreseeable future.
4. Another major failure on the horizon in the crypto space
Moving beyond forecasts such as Sei crypto price prediction, we predict that another game-changing failure will beset the cryptocurrency industry in 2024.
Terra Classic (LUNC), which used to be called “Terra,” and TerraClassicUSD (USTC) were the worst cryptocurrencies of 2022. That same month, TerraClassicUSD was the fourth-biggest stablecoin by market cap, and Terra Classic was the fourth-biggest digital currency by market cap. Nevertheless, things quickly fell apart.
Although most stablecoins use paper currencies to stay tied to the U.S. dollar, TerraClassicUSD uses an algorithm. Multiple buyers in USTC broke this peg, which opened the door for arbitrage and caused a chain reaction in Terra’s stablecoin and Terra itself.
Shortly after this epic failure, we saw fraud happen in the FTX cryptocurrency market. Fewer 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 evident that the former CEO of FTX could get up to 110 years in jail.
Although it seems at this point that the crypto market’s woes are now behind it, one cannot completely rule out the possibility of another major failure. The cryptocurrency space is still in its nascency, 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 hurt investor’s portfolios in 2024.
Others think that Tether (USDT), the biggest stablecoin by market cap, might fail if it ever stops being backed by the dollar. Despite Tether’s best attempts to prove that its stablecoin is fully backed, critics remain on the company’s neck, leaving the slim chance of a Tether failure being crypto’s “black swan” event of 2024.
Conclusion
The cryptocurrency market has gotten 2024 off to a splendid start, with many of the top coins seeing double-digit gains. Amid the optimism, however, investors must remain alert to the possibility of a major market slip-up. This article outlined four controversial cryptocurrency predictions for 2024. While there is no guarantee that any of them will take place, they remain highly possible and worth keeping in mind.
