Likely Behavioral Trends to Emerge from Retail Crypto Investors in 2024
This article will discuss the likely behavioral and overall trends we can expect to see in retail crypto investors in 2024. However to put 2024 in better perspective we must reflect on 2023 and the different market trends we noticed emerge. The top three would come down to:
1. The Major crash of Celcius, Terra Luna, FTX -> reduced consumer trust -> increased focus on regulation
2. Crypto Winter and the fall of venture funding that has led to more of an institutional focus
3. The ETF and Stablecoin debate in the US & abroad
2023 paved the way for an even higher focus on regulation after some major crashes of 2022 with cryptoexchange FTX, Terra Luna, and Celcius -whose bankruptcy filings attributes some of its liquidity woes to “the domino effect” of LUNA’s collapse. Apart from this accelerating an already impending crypto winter, those events turned the once trusting consumers to more concerned about having the proper regulations in place. With six bills getting introduced in 2022, ranging from the various aspects of compliance or investor protection, and the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) jockeying for the position of regulators, 2023 continued on the same trend, and so will 2024.
Though briefly mentioned in the paragraph above, the crypto winter led to more of an institutional focus. Many things played into the crypto winter like inflation in the US, and it is a known economic driver in the crypto market place. As well as the unignorable and aforementioned collapse of the; FTX, cryptocurrencies Luna and TerraUSD in May 2022 -which brought down Three Arrows Capital and wiped out $42 billion in investor value- and Celsius Network -which filed for bankruptcy protection in July 2022. All these happenings in 2022 inevitably split into 2023. And with new laws, and less consumer trust it accelerated an already growing institutional focus for investors who would like a more regulated and traditional wrapper for investment. After all, they bring an expertise that leads to more regulation, compliance, and transparency.
And to wrap 2023s trends, we’ll close with the ETF and stablecoin debate in the US and abroad. After a turbulent 2022, and rocky start to 2023, increased regulation opened the door for more SEC enforcements in the bitcoin arena opened up more law enforcements in the area of stablecoins and ETFs -that all the world “tuned in to.” Take for example, one of the much anticipated stablecoin bills, H.R. 4766, the “Clarity for Payment Stablecoins Act of 2023.” The bill gave states more control over the licensing of stablecoin issuers. And on July 27, 2023, it was passed out of committee with a bipartisan vote and now heads to the floor of the House for consideration.
Now with the stage better set here are some trends we expect to continue into 2024, broken into three overarching categories being the environmental, personal, and market related trends we see occurring in 2023.
Good bucket, would also talk about general economy things like inflation, high interest rates, employment levels, etc
Environmental: Speculation about the Role of Cryptocurrency in a Major Economic Driver’s Upcoming Elections
- Many happenings and major laws in the US regarding the crypto industry have affected investors all over the world, this is a trend we do not see ending with 2023 but rather increasing with their impending elections.
- Furthermore, a major share of voters in the USA (8–10%) hold crypto, changes in their investing behaviors could affect the market as a whole. Especially when looking at the deep influence members of the crypto community have on each other. While past candidates have been silent on the topic of crypto, take for example Donald Trump, a lot more new candidates for the November 2024 elections seem to more willingly take a stance on crypto.
- Someone is going to get in office, and it will only be a matter of time before we see the pre and post influence of who does get in office, in the 2024 crypto market.
Personal: The Toll of an Unstable Climate
- Moving from political figures, and taking a closer lens on the members of the crypto community who have influence over each other, a lot has been happening on an individual level.
- After all,the average crypto holder in the US, despite the crypto winter, is definitely feeling the heat of inflation, job loss, and an overall unstable environment.
- With such an investing and personal climate consumers have all the reason to be more skeptical, and some have even chosen to opt with the more “traditional” institutions for investing. This, amongst other reasons, has led to a ripple wave in Institutional interest in ETFS & Stablecoins.
Market Trend: Another Major Prediction for Bitcoin in 2024
- As for market trends, here is a recent market trend to go by, aside from observed trends in bitcoin over time.
- On June 22, 2023, bitcoin made a new one-year high, which marked the very first time in a year. In the past, this “signal” has alluded to the approaching end of crypto bear markets and the start of new crypto bull markets.
- Finally, Matrixport’s view is consistent with bitcoin’s tendency to chalk out sharp uptrends in the 12–18 months after the mining reward halves. This is crucial since Matrixport is a reliable authoritative voice; and the fourth halving is set to happen in March/April next year.
Which trend surprised you the most, or would you say you had seen coming all along?
Sources
https://www.coindesk.com/markets/2023/07/06/bitcoin-could-rally-to-125k-by-2024-end-matrixport/
https://time.com/personal-finance/article/popular-crypto-scams/
https://www.coindesk.com/consensus-magazine/2023/07/25/bitcoin-is-on-the-ballot-in-2024/
https://www.coindesk.com/consensus-magazine/2023/01/24/us-crypto-regulation-approach/
https://www.coindesk.com/consensus-magazine/2023/01/24/us-crypto-regulation-approach/
https://www.coindesk.com/layer2/2022/11/09/8-days-in-november-what-led-to-ftxs-sudden-collapse/
https://www.forbes.com/advisor/investing/cryptocurrency/what-is-crypto-winter/
https://www.coindesk.com/consensus-magazine/2023/01/24/us-crypto-regulation-approach/
