By Dr. Anna Becker, CEO and cofounder of Endotech.io
It’s a new year – and just like with everything else, there will surely be new developments in the cryptocurrency sector. Politics and economics, of course, are big influences on crypto. But personalities can also have an outsized influence on the industry. The past year has provided two excellent examples of how personalities drove crypto values, mostly downwards; SBF’s conviction on fraud and mismanagement charges were the direct cause of a sharp drop in crypto valuations, while his ongoing trial scared off potential investors and VCs who once gladly invested in the crypto market. Meanwhile, a settlement by CZ that led to his departure as Binance CEO – and the company’s remittance of over $4 billion in fines – has been termed a “turning point” in the government’s stance on regulation and enforcement.
With SBF and CZ now out of the picture, new players, from national leaders to entrepreneurs, will take the spotlight in 2024, and likely pave the way for an innovative, regulated and widely used crypto market.
Gary Gensler: Finally, reluctantly, bringing crypto into the mainstream financial system
The SEC chair is likely to have a major impact on crypto valuations this year, as he becomes less able to resist the tide of consumer and investor demand – as well as court orders – for the approval of spot ETFs for Bitcoin and other cryptocurrencies.
Investment giant Grayscale has been trying to get SEC approval for these investment vehicles for years. After several denials, which spurred Grayscale to file a lawsuit against the SEC, Gensler finally may be relenting in his virulent opposition to crypto. The agency announced that it would not appeal a court’s order for a rationale on why it has denied Grayscale the spot ETF approval, and in recent days, the SEC has been holding talks with Grayscale – as well as with other investment giants, like Blackrock and Fidelity – on developing Bitcoin spot investment vehicles.
While Gensler has been one of the most virulent government opponents of crypto investment “normalization,” the court’s slap in the face has apparently induced a change in his attitude. When he finally takes his finger out of the Bitcoin ETF dike, Bitcoin – and crypto in general – will shoot up in value, attracting new investors, inspiring new vehicles, and likely causing a sharp increase in the use of crypto for business transactions. According to industry experts, spot ETF approval is likely to push up the price of Bitcoin by some 6% – in just the first month. After a year, Bitcoin is likely to be 74% more valuable than it is now.
Javier Milei: Leading an international crypto revolution
Even before he was sworn in as president of Argentina on December 10th, Javier Milei’s election spiked Bitcoin’s price by some 3%, on the strength of his views on crypto. Milei seems keen to upend Argentina’s current financial system in a country that, by all accounts, is an economic failure – with a high percentage of poverty and galloping inflation, despite a wealth of resources, natural and otherwise. In his first economic move, Milei devalued the Argentinian peso by 50% against the dollar, an initial step in his efforts to wean the country off its own currency, substituting it with the US dollar.
But Milei doesn’t intend to stop at the dollar. He’s a big believer in cryptocurrency, calling it the “natural answer” to the “central bank scam” that has controlled the world economy for years and allowed governments to “cheat good people with inflationary taxes.” Bitcoin and other cryptocurrencies return “the power of currency” to the people, and as a libertarian, he is very interested in doing that.
If Argentina does adopt Bitcoin as legal tender, it won’t be the first country to do so; El Salvador adopted that stance in 2021. But Argentina’s $1 trillion+ economy is far larger than El Salvador’s, so the impact of Milei’s adoption of Bitcoin is likely to be far greater. In fact, that ripple effect may already be making itself felt. Bitcoin’s value relative to the peso has jumped in recent days – but it has also appreciated significantly in countries with economic issues similar to Argentina’s, including Turkey, Egypt, and Nigeria. Milei’s foray into cryptocurrency may just jumpstart a worldwide movement among developing countries to get out from under the thumb of Western bankers, from the Fed to the IMF, and chart their own course.
Brian Armstrong: Inspiring responsible innovation in crypto and beyond
Celebrity has been a building block of crypto since its inception, but most crypto celebrities – like SBF and CZ – were known as much for their opulent lifestyles and disregard for rules as their investment savvy, never mind intelligence. Coinbase CEO Brian Armstrong is a crypto celebrity too – but he’s better known for his high-level intelligence than his (presumably) high-level net worth. Armstrong has emphatic views on a number of issues, such as keeping government regulations on AI, as well as cryptocurrencies, clear and to a minimum, developing “flatcoin” currencies pegged to the cost of living instead of another currency, and utilizing blockchain to ensure online reputation safety, among other things.
Ideas are just that, and some tend to be more workable than others. But to present a persuasive case for innovations based on advanced concepts and technologies like blockchain requires some serious intellectual chops – and Armstrong apparently has them. That, too, could foster a major change in how crypto currencies are used, and how they are seen, by the public.
Instead of viewing them as just another get-rich-quick scheme that investors need to get out of before the scam comes crashing down, Armstrong and others of his intellectual stature could get people and governments to think about how cryptocurrencies and blockchain technology could be used to solve economic and social problems, foster a different approach to investing, trade, and international relations, and improve our daily lives. Just by presenting these ideas, Armstrong changes the public discourse on cryptocurrencies, veering it toward innovation and ideas, instead of Instagram selfies of fast cars.
Ushering in a new era of regulation, wide-scale adoption and and responsible innovation
As these three personalities and their bold moves and statements show, 2024 is poised to be a year of change for crypto. Where, exactly, it will go remains to be seen. But it is clear that along with the rise of AI, crypto is one of the most dynamic forces in the financial world today. Innovation, regulation and wider adoption will carry crypto far, providing opportunities for everyone from quant investors who want new reliable alternative assets to trade with the latest AI-based tools to retail consumers who are looking for faster ways to transfer value. Crypto, and the realms of finance, banking and investing, are entering a new era.