As 2024 approaches, cryptanalysis firm Nansen ai/articles/2024-high-convictions” target=”_blank” rel=”nofollow”>offers insightful predictions for the crypto sector, anticipating significant developments and changes. Despite cautious optimism, they acknowledge that there is a 10% to 20% chance that inflation will resurface after the U.S. Federal Reserve's (Fed) pivot, which could affect stock prices. cryptocurrencies.
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At the time of writing, the total cryptocurrency market capitalization is $1.5 trillion on the daily chart and appears poised to continue rising in the long term.
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crypto total market capitalization trends to the upside on the daily chart as the year ends. Source: TOTAL on Tradingview
ai as a primary use case: the new hot thing in 2024?
According to the firm, a key high-conviction bet for 2024 is the emergence of artificial intelligence (ai) agents as primary users of blockchain. The integration of ai and blockchain is expected to “advance rapidly, improving blockchain performance and expanding use cases.”
This development marks a crucial step in the blockchain world, potentially transforming the way transactions and interactions are processed on the network.
Another area of focus is intent-centric applications that address user experience (UX) challenges in the crypto space. These applications are designed to simplify users' interactions with networks, removing complexities and making the technology more accessible to a broader audience.
As seen in the chart below, the integration between ai and cryptocurrencies is already paying off for early investors. Despite persistent downward pressure across the board, the ai token sector has been among the best performers in the nascent industry.
2024 is also predicted to be a crucial year for decentralized exchanges (DEX). Nansen predicts that DEXs will gain significant market share from centralized exchanges (CEXs), driven by monetary incentives and innovative features.
This change could mark a fundamental shift in the cryptocurrency trading landscape, emphasizing the growing importance of decentralized financial systems. Since 2020 and 2021, DEX has been gaining ground over CEX, and the trend could favor the former in 2024.
Finally, Nansen believes that the largest and most trusted cryptocurrency, bitcoin, is expected to ensure a broader range of use cases beyond simple transactions. This expansion could open new avenues for bitcoin and highlight its versatility and strength as a digital asset.
Use cases like non-fungible tokens (NFTs) have already gained popularity in 2023, and this trend could continue. However, some members of the bitcoin community are fighting the change, which could hinder its adoption and implementation.
Nansen: Analysis of the market scenario for 2024
Potential scenarios for the crypto market in 2024 depend a lot on the macroeconomic situation. In a “soft landing” situation, where inflation slows without dramatically increasing unemployment, cryptocurrency prices are expected to grow steadily.
However, there is also the possibility of a further acceleration in inflation or a recession, which would pose challenges for cryptocurrency prices and change the bullish narrative. Nansen's analysis also recognizes structural factors likely to influence the cryptocurrency market, such as the statistical momentum around the bitcoin halving.
These structural drivers also include blockchain adoption by major traditional players and regulatory clarity, particularly around a btc spot exchange-traded fund (ETF) in the US. However, unknowns such as geopolitical events and macroeconomic changes could significantly affect the market.
In conclusion, Nansen's research presents a nuanced view of the cryptocurrency market in 2024, highlighting areas of potential growth such as the integration of ai and DEXs, while remaining cognizant of the challenges ahead. The year promises to be crucial for the crypto sector, with significant advances expected in technological integration, market structures and the regulatory landscape.
Cover image from Unsplash, chart from Tradingview
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
