Fidelity, which has assets worth $11.5 trillion under management, announced five question marks to pay attention to in the cryptocurrency market in 2024.
“Will the Fed lower interest rates?” Starting with the question, Fidelity Research Director Chris Kuiper said that changes in interest rates will “greatly” affect the performance of the cryptocurrency market in 2024 thinks:
“Our research shows that there is so far a high correlation between digital assets and liquidity and money creation scales. “We continue to monitor interest rates and changes in the central bank’s balance sheet.”
Another question is about the block rewards expected to be held in April/May 2024. will cut it in half It was related to the Bitcoin halving. Bitcoin after every halving in the past if he breaks the record de Kuiper stated:
“The rate of increase in price becomes smaller and smaller with each halving cycle. Even though Bitcoin’s production rate dropped by half, this number a bigger market “It is cut in smaller and smaller amounts against its value, so the impact of each halving event on the price decreases over time.”
Cryptocurrency community, US Securities and Exchange Commission (SEC) with spot Bitcoin ETFs He wonders how the decision he will make will affect the market. Some investors due to technical complexities While it is stated that he is hesitant to buy Bitcoin, he is concerned about ETFs. “It could open up a new group of investors who want to take on this risk but can’t, or don’t want to do so until they can do so through a stock broker.” comment was made.
This year scaling problem aiming to eliminate Layer 2 projects is thought to be significant. Parth Gargava, Product Architect at Fidelity Labs, had this to say about them:
“Improvements to the blockchain infrastructure mean that you are unlikely to experience congestion on dense blockchains and that users from high transaction fees It means he won’t complain. “These roads opened in the field of infrastructure may create opportunities for new projects in the upcoming bull market.”
of these projects whether it will hold or not Regarding the question, “These emerging Layer 2 projects will probably need to go through some pain before they become widely used.” It was said.
The last question to consider is related to legal regulations specified. While the European Union has introduced licensing requirements for cryptocurrency service providers, regulations in the United States remain unclear.
Kuiper, “What is clear is that this industry really needs and wants (legal) clarity in order to move forward.” said.