Led by Bitcoin, cryptocurrencies promise a strong performance in 2024, aiming to bring an end to the so-called “crypto winter.”
Analysts believe this year marks a period of consolidation for digital assets, driven by significant events such as the approval of Bitcoin ETFs, the halving, a more industry-friendly blockchain, and, notably, the stellar entry of artificial intelligence into digital assets.
In the “Crypto Landscape in Latin America: 2nd Semester 2023 Report,” Bitso highlights the growing crypto interest in countries like Peru, Chile, Ecuador, as well as in Central American nations such as El Salvador, Guatemala, the Dominican Republic, and Costa Rica.
Ten years ago, the entire crypto industry’s market capitalization was less than $10 billion; today, it stands above $1.5 trillion.
According to Eduardo García, founder of the Bando platform, cryptocurrencies like Bitcoin, Ethereum, and Solan are capturing the attention of major global financial institutions.
“In January, we saw the approval of Bitcoin ETFs in the United States. This year, the approval of Ethereum ETFs is likely, which means these assets will be available in major brokerage houses and for large asset managers like Blackrock. This opens the door to over $15 billion available for investment in these assets,” García emphasizes.
BITCOIN MAINTAINS ITS PROMINENCE
Bitcoin is set to regain the spotlight. After a challenging year in 2022 and a recovery shown last year, by early March 2024, Bitcoin reached a price above $69,000, a level not seen since 2021.
Bitcoin started at $16,547.91 per unit at the beginning of 2023, reaching $41,438.89 by the year’s end, a percentage increase of 150.42%.
Data from Bitso shows that Bitcoin remains the preferred cryptocurrency in Latin America and worldwide.
Nevertheless, people have continued to buy and adopt crypto, indicating a renewed interest in more established digital currencies to escape volatility, and in crypto platforms that demonstrate trust and transparency.
THE MOTIVATORS
Cryptocurrency enthusiasts are anticipating sustained recovery, which is closely tied to technological innovation, institutional adoption, and regulation, notes Luis Ayala, BitGo’s Sales Director.
Innovation remains a significant driver for developing new products and services within the crypto space. Advances in blockchain technologies, smart contracts, scalability solutions, and security through custodians are expected to drive project development across various crypto sectors.
“Institutional adoption can provide legitimacy to the crypto space and increase investor confidence, which in turn could boost growth in different related sectors,” adds Ayala.
A clear and favorable regulatory framework can provide a safer and more predictable environment for companies and users operating in the crypto space, facilitating sustained recovery. “Well-defined regulation can encourage investment and adoption while mitigating risks associated with regulatory uncertainty,” he adds.
THE TRIUMPHANT ENTRY OF ARTIFICIAL INTELLIGENCE
A study by BitGo, a company focused on digital asset custody, on market perspectives suggests that artificial intelligence will be key in 2024.
Companies are striving to establish themselves in the market and tokenize their services, but the success of those integrating AI will depend on their different value propositions and how they adapt to the dynamics of the digital asset cycle.
Carmen Díaz Peña, Director of Finance at the Tecnológico de Monterrey Business School in Mexico, highlights that AI tokens “seek to boost artificial intelligence applications in making increasingly accurate predictions through automated movements and self-learning.”
Not forgetting that artificial intelligence is also being used “to improve efficiency in cryptocurrency mining and thus reduce energy consumption,” writes the TEC academic in her article “Cryptocurrencies and their Relationship with Artificial Intelligence.”
THE KEY TO 2024: THE HALVING
Experts in the world of Bitcoin believe that the next halving will occur during the second quarter of this year. This event halves the reward received by Bitcoin miners. It occurs every four years, or every 210,000 mined blocks, to control inflation and the supply of the digital currency.
“It’s difficult to predict the exact impact on the price, but historically, halvings have preceded periods of increased Bitcoin value,” explains Mónica Talán, founder of CryptoConexión.
Analyzing the history of halvings, significant post-halving growth is observed. For example, after the 2016 halving, the cryptocurrency experienced a growth of 284%, and 432% after the 2020 halving. Therefore, estimates for 2024 are very positive.
Source: Forbes Centroamérica
