:max_bytes(150000):strip_icc()/dotdash_INV_final_Uptrend_Jan_2021-01-acc6ad4a4ea04a079698b3518d5831b4.jpg "3 Cryptocurrency Trends Investors May Miss")
Analysts and investors have had a lot to digest since the start of 2024, as the hype surrounding the approval and launch of the 11-item Bitcoin ETF has died down and various SEC lawsuits continue to drag on. In addition to interesting news headlines, market sentiment and appetite for cryptocurrencies is also influenced by the upcoming US presidential election. With former President (and current candidate) Donald Trump opposing central bank digital currencies (CBDCs) and other politicians condemning the development of these tools, the issue of cryptocurrencies will play a role in upcoming campaigns. On the other hand, congressional leaders continue to highlight the potential role of cryptocurrencies in financing terrorism and criminal activity, although these amounts are still dwarfed by US dollar funding.
While these headlines are important for the long-term sustainability of both Bitcoin and the cryptocurrency market as a whole, there are many other headlines and trends that investors should pay attention to. An important trend to note is that institutional buyers purchased millions of Bitcoin in 2024, although political uncertainty still dominates United States politics. Rather than adding fuel to the debate on social media, there are a number of serious issues that are significantly fueling the political and business debate.
Let's look at some of them.
FTX aims to connect investors
The latest plan, showing the company's intention to reach agreements with investors, is seen by many as a surprising turn in the ongoing bankruptcy and bankruptcy saga of FTX. This is absolutely good news and worth mentioning for several reasons. First, investors who, through no fault of their own, were harmed by Bankman-Fried's criminal activities will be reimbursed. Secondly, it also shows that the bankruptcy process and associated laws are capable of handling complex, large, international cryptocurrency filings such as FTX. Finally, this should be another example for cryptocurrency investors and those who advocate that, despite the differences between cryptocurrencies and fiat assets, investors should treat cryptocurrencies as a financial instrument.
It is important to note that these payments will be made at the market value of the cryptocurrencies when FTX files for bankruptcy. By comparison, the price of Bitcoin at the time was around $20,000 per token, well below current market levels. Despite the disappointment of some investors, FTX's repayment of debt to investors is remarkable news.
Crypto mining will be studied
It's no surprise that energy consumption and the environmental impact of cryptocurrencies have once again become the focus of attention among crypto-savvy investors and market participants. This time the investigation went beyond words and took the form of a government investigation. In particular, the US Energy Information Administration will begin to closely monitor the electricity consumed by cryptocurrency mining companies operating in the US. asked to respond with detailed information on energy use and other operational statistics.
This request and approval was given as part of the emergency data collection required by the Office of Management and Budget. This official request and additional request come after a difficult year for crypto miners, both from a profitability and regulatory perspective. As Ether, the second-largest cryptocurrency on the market, continues to reduce its energy consumption by moving to a proof-of-stake consensus model, policymakers continue to focus on more data. This interest continues as a recent report from the Rocky Mountain Institute found that Bitcoin consumes 127 terawatt-hours (TWh) more globally than Norway uses.
Tokenization is spreading
In 2024, the movement of TradFi organizations into the blockchain and cryptocurrency space continues to accelerate. Beyond the current Bitcoin ETFs that have dominated much of this conversation, the trend towards developing and investing in more tokenized products continues to accelerate. In particular, it aims to accelerate progress in the tokenization of real assets, not just financial instruments.
In particular, the Boston Consulting Group estimates that the market for tokenized liquid assets will be $16 trillion, but that is only part of the story. According to a survey conducted by Celent and BNY Mellon, 91% of institutional investors are interested in investing in tokenized assets, and 97% agree that tokenization will fundamentally change the world of asset management. The trend is obvious; Tokennomics is coming to mainstream financial services, and investors of all sizes should prepare for this paradigm shift.
Cryptocurrencies and tokenized assets continue to enter the financial markets, and investors should take note.