What we expect to see in 2024

As we enter 2024, our team extends heartfelt wishes for a joyous and prosperous new year. At XEROF, we look forward to this new chapter's opportunities, building on our exceptional 2023 performance. 

In this newsletter edition, we are excited to share our top ten anticipations for the upcoming year in the digital asset and blockchain space. 

Here's to an exciting 2024!

1. Bitcoin ETF Approval on the Horizon: Impacts on Price and Institutional Investment

Bitcoin's price soared in 2023, reaching over $44,000 in early December—a level not seen since April 2022. Year-to-date gains exceeded 160% by December 21, primarily attributed to optimistic expectations for approving the first U.S. spot Bitcoin exchange-traded fund (ETF). Ongoing discussions between the SEC and asset managers have progressed to technical details, hinting at a potential imminent approval.

The SEC is expected to inform 14 asset managers about the approval status of spot Bitcoin ETFs next week, possibly by Tuesday or Wednesday. Notable contenders include Ark Investments, 21Shares, Valkyrie, Bitwise, WisdomTree, Franklin Templeton, BlackRock, VanEck, and Invesco. Fidelity leads with the lowest proposed sponsor rate at 0.39%. 

XEROF believes approval of Bitcoin ETFs could attract significant institutional investment, potentially influencing Bitcoin's price and strengthening its position as a store of value. However, analysts caution the public about potential market volatility and increased speculative trading associated with ETFs.

2. MiCA Unveiled: Transforming Cryptoasset Regulation in the E.U.

Markets in Crypto-Assets Regulation (MiCA) establishes a dedicated regulatory framework for cryptoassets; its key objectives include enhancing investor protection, preventing misuse, and promoting innovation in the E.U. Replacing existing national frameworks, including France's PACTE law, MiCA mandates registration for cryptoasset service providers (CASPs). Authorised providers gain a European passport for cross-border services, with a requirement to report on environmental impact.

The framework was published on June 9, 2023, and MiCA came into force 20 days later. European Union member states must now enact national laws in line with the regulation by March 2024, with complete implementation scheduled to unfold gradually throughout 2024. It will be up to national regulators to define specific requirements, such as capital limits. As the European cryptoasset markets adjust to new regulations, XEROF believes MiCA will bring about heightened maturity and legitimacy.

3. Cryptasset Confidence: UAE and Singapore Set the Stage for Digital Asset Triumph in 2024

The United Arab Emirates is gearing up for digital asset growth in 2024, supported by progressive regulatory developments. In January 2023, the Dubai Financial Services Authority (DFSA) proposed a regulatory regime for cryptoassets, providing a solid foundation and fostering innovation while ensuring compliance. As reflected in the Digital National Economy strategy, the UAE actively promotes digitalisation. It aims to foster a favourable environment for introducing cryptoasset products and businesses, which is expected to continue in 2024.

In addition, Singapore’s regulatory strides in the cryptoasset space also position the nation favourably for 2024. Last year, the Monetary Authority of Singapore (MAS) announced enhanced measures requiring digital payment token (DPT) services to keep customer assets safely in a statutory trust, bolstering investor protection. The move mitigates the risk of asset loss and misuse, fostering confidence in the digital asset ecosystem. This proactive approach solidifies Singapore's reputation as a cryptoasset-friendly jurisdiction, encouraging innovation while safeguarding stakeholders.

4. USA’s State Governors' Digital Asset Agenda: Implications and Innovations Ahead

In 2023, state governors and legislatures made significant strides in digital asset regulations. California Governor Gavin Newsom signed Assembly Bill 39, marking a watershed moment for state digital asset policy. The Bill, “The Digital Financial Assets Law” (DFAL), sets comprehensive rules for digital financial asset businesses in California.

Under this legislation, companies will operate through a licensing and supervisory regime encompassing capital and liquidity requirements, regular disclosures, and stablecoin approval standards. Modelled after New York's "BitLicense," the law offers an expedited licensing pathway for businesses adhering to similar state standards. 

Overall, XEROF expects this Bill to promote innovation in the cryptoasset space. State-level actions in 2024 will hold immense implications for businesses and consumers, highlighting the critical role of governors and legislatures for digital assets.

5. Analyst Predicts Extended Bitcoin Surge Post-April 2024 Halving, But Caution Advised

Recently, cryptoasset analyst Ali Martinez sparked optimism by predicting an extended bullish trend for Bitcoin following the upcoming April 2024 halving. He notes the historical pattern of three years of bullish trends followed by a year of bearish correction, suggesting BTC's current upward phase may extend until December 2025.

The impending Bitcoin halving, expected at the 740,000 block milestone, will reduce the block reward from 6.25 to 3.125 coins. The exact date remains to be determined due to variable block generation times. The previous halving in May 2020 saw a decrease in rewards, contributing to a bullish scenario and a significant price increase over the following year.

Although this is positive news, XEROF would like to remind investors that it is impossible to predict the outcome of the forthcoming halving with certainty.

6. Increased Use of Stablecoins for Cross Border and International Payments 

In just two years, the global stablecoins market has surged past a $100 billion market cap, primarily propelled by applications in DeFi, trading, and liquidity management.

In 2023, several major companies adopted stablecoins for various applications, including PayPal, Visa, Mastercard, and more. As we enter 2024, our research team predicts we will likely see a substantial uptick in investors using stablecoins for cross-border and international payments. Typically used in trading and settlements, stablecoins have now found a significant role in facilitating swift and cost-effective cross-border transactions. Innovative fintech solutions are at the forefront, offering simplified conversions into fiat currencies, leading to heightened acceptance.

Fuelled by their stability and efficiency, stablecoins have become a preferred choice for money transfer services. XEROF remarks that this trend extends to the checkout experience, and many businesses are likely to embrace stablecoins as a mainstream payment method in 2024.

7. Growing Momentum in Asset Tokenisation as Survey Reveals Industry Trends

A recent survey by Calastone highlights that 67% of U.S. asset managers anticipate tokenised products within a year, and 96% in Asia expect such products within three years. 

Motivations for tokenisation include cost savings (30%), enabling personalised investment experiences (25%), and enhanced liquidity management (23%). The survey, conducted in Q3 with 141 participants, reflects Asia's proactive stance, citing initiatives like Singapore's Project Guardian as crucial to the region's global lead in asset tokenisation. Notable partnerships like JP Morgan's collaboration with Apollo Global further underscore the industry's momentum in embracing blockchain technology for innovative solutions.

8. Ordinals Protocol Sparks $100M Transaction Surge on Bitcoin, Investor Opportunities Incoming

Introduced to Bitcoin in early 2023, the Ordinals protocol has catalysed unprecedented activity on the blockchain. Amidst low transaction fees and impending reductions in miner revenue, Ordinals has driven over $100 million in transaction fees this year. Operating on top of Bitcoin, Ordinals enable the secure transacting of fungible and non-fungible tokens (NFTs). Ordinals distinguishes itself by treating Bitcoin as a certificate model and as the medium for NFTs. 

One successful project example is "Ordinal Punks", a tribute to the iconic CryptoPunks integrating unique ordinal inscriptions. With a focus on premium art, analysts anticipate a surge in Ordinals for 2024 with the emergence of startups. In the coming year, there will also likely be advancements in tokenisation protocols, providing individuals opportunities to invest in a broader range of assets with reduced capital requirements. 

9. Anticipated NFT Trends and Their Role in the Digital Economy

Regarding the anticipated 2024 bull run, some analysts predict heightened prominence for NFTs within the digital economy, marked by several key trends. Foremost among these is the wave of tokenising physical assets, extending from real estate to luxury goods and intellectual property rights. This shift promises to democratise investment opportunities and fortify authentication processes. 

Furthermore, NFTs will likely play a central role in the metaverse, influencing virtual ownership and governance structures. Another significant trend on the horizon is the enhanced cross-platform compatibility of NFT standards and marketplaces, paving the way for integration across various platforms and ecosystems. 

XEROF also expects the immutability of blockchain technology to ensure the authenticity of NFTs, positioning them as crucial tools in the ongoing battle against counterfeiting and art fraud, benefiting artists, collectors, and businesses.

10. XEROF's 2023 Performance and 2024 Projections

After a remarkable 2023, XEROF anticipates further strides for the coming year. The company's performance saw a 500% surge in transaction volumes from H1 to H2 2023 and a 40% increase in ultra-wealthy individuals and family offices availing of our cryptoasset diversification services. We were pleased to report that our banking partnerships also grew by 500%.

In addition, XEROF launched a $100 million Bitcoin actively managed certificate (AMC) in collaboration with GenTwo, tailored for institutional investors. The AMC simplifies custody complexities, allowing for seamless cryptoasset diversification. Our co-founder, Nick Ntigrintakis, revealed promising numbers on XEROF's BTC tracker, showcasing a 9.14% increase from July to November 2023. As we embark on 2024, XEROF remains committed to facilitating global transactions, aiding institutional investors, and enhancing our services.

Disclaimer: Kindly be aware that the information provided herein is intended solely for informational purposes and should not be construed as legal, tax, investment, financial, or any other professional advice.

About XEROF

XEROF is a Swiss-licensed Crypto Gateway that offers exchange services for customers who possess crypto wallets and want to use them as fiat currency to purchase real estate properties and luxury goods.

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