A forecast was given for cryptocurrency and digital ruble for 2024: there will be no breakthrough

Is it easy to make predictions? I confidently say: it’s easy. If you want to be known as a good futurist, just say what people expect to hear. Alas, unfortunately, such expert fame will most likely not last long. Today we know that even the “obvious and inevitable” future, predicted by the unanimous opinion of the best experts, armed with the best analytical programs and the most accurate models of reality, does not tend to come true… Especially in the social sciences, which include both politics and economics.

That is why in the modern “economy of trust” the opinions of authorities are so significant. But what if the expert has a personal interest in exactly the development of events that he predicts? At least because the fulfilled forecast adds weight to his expert opinion? Fortunately, in the real economy we are dealing with more than just psychological factors. There are also objective economic laws. But in the “virtual” world – cryptocurrencies and digital assets – trust is actually the only real essence.

Let’s see how the forecasts for 2023 came true in this area. Most of the predictions were, of course, about the Bitcoin rate. Well-known venture investor and billionaire Tim Draper predicted an increase in the value of Bitcoin by the end of the year to $250 thousand, while analysts at Standard Charted Bank predicted, on the contrary, a drop to $5 thousand. By mid-year it seemed that bankers were closer to the truth. But at the end of the year, Bitcoin unexpectedly “shot” on expectations of good news from American regulators and reached $45 thousand. The famous American television stock analyst Jim Cramer recommended getting out of crypto assets, since they will not bring money in 2023, but people who bought Bitcoin at the beginning of 2023 and sold at the end could receive up to 50% profit.

Analysts from the venture capital company Outlier Venture, for their part, called for investing in NFTs (non-fungible tokens, certificates of authenticity of digital objects), as they expected the growth of their market. But during 2023, interest in these assets faded completely. NFT digital pictures that were worth several thousand dollars a couple of years ago are now worth nothing. The promise of an increased supply of stablecoins, tokens fixedly pegged to convertible currencies, has not materialized. The Binance exchange token pegged to the dollar has ceased production, the Circle USDC token has been halved. The Societe General bank token tied to the euro turned out to be of no use to anyone at all.

The promised breakthrough in blockchain gaming, which promised a revolution in entertainment, but rather raised the question of what it is and why it is needed at all, also did not happen. The tokenization of real assets (real estate, gold, art) did not produce a market revolution, although the market for such assets has increased. “Web 3.0.”, browsers with built-in crypto wallets did not occupy any noticeable market share. Moreover, the most popular of these browsers, Brave, was involved in a scandal involving the sale of user data. And finally, in the real sector, the creation of the “blockchain-as-a-service” service by IT business giants – Microsoft, Accenture, IBM, AWS – has not led to any noticeable increase in the number of blockchain solutions in the field of automation of anything. That is, blockchains have no real applications outside of crypto even in 2023. On the other hand, the largest collapse of crypto exchanges in history – the collapse of FTX – although it dragged five American banks to the bottom at once, did not lead to long-term consequences for the crypto market. Yes, a huge number of people lost their money, but the belief in the miraculous properties of the blockchain remained, as did the price of Bitcoin.

What do experts predict for us in 2024? Yes, in principle, everything is the same as in 2023. The synergy of virtual reality, artificial intelligence and blockchain into new breakthrough products that make the world a better place. An inevitable new Bitcoin growth cycle after the mining reward has been halved. There are fewer unmined bitcoins – investors need to hurry to get them! Digital NFTs will make a triumphant comeback in 2024 and become a new marketing driver for major brands. Tokenization of real assets will continue (issuing non-fungible certificates for real assets), and Ethereum will be the main way to do this. Stablecoins (cryptocurrencies pegged to real currencies) will finally become a standard banking product and will be used everywhere. Finally, the US Securities and Markets Commission (SEC) approval of the creation of an exchange-traded fund (ETF) investing in Bitcoin will inevitably lead to the full global acceptance of Bitcoin as a critical asset, on par with oil and gold. .

It would be too long to analyze these predictions in essence, and this task is quite specific. In my opinion, most predictions are essentially a bunch of buzzwords that have no technical or economic meaning. What might the integration of virtual reality, blockchain and artificial intelligence look like technically? And, most importantly, for what purposes might it be needed? The US SEC’s approval of traded funds with investments in Bitcoin – with the caveat that they are purely monetary – has clearly not led to the recognition of cryptocurrency as a fundamental value. Moreover, Bitcoin, which had risen markedly in anticipation of SEC approval, fell sharply after the funds were created. The regulation of ETF funds introduced by the SEC is very strict, and it is obvious that this mechanism did not attract new investors to cryptocurrency, and the huge movement of funds into funds occurred because investors already working with crypto transferred their investments from previously permitted closed-end mutual funds and trusts into a more convenient tool. That is, the first forecast for 2024 – about the recognition of the value of Bitcoin equal to gold and oil – has no longer come true. But the next two predictions about the crypto market will definitely come true. Firstly, this is a decrease in mining rewards and, secondly, increased regulation of crypto in the United States. Both of these events, alas, are definitely not positive factors for investing in crypto assets.

However, for you and me, the issue of conditional legalization of Bitcoin in the United States through exchange-traded funds will become even more abstract this year than in the past. Because the more this market is involved in the American legal field, the more problematic investments in it are for Russian citizens. The largest crypto exchange Binance left the Russian Federation in September, Coinbase blocked Russian clients in May, Kracken is under investigation in the United States for refusing to register as an exchange and comply with regulator requirements. Most likely, the isolation of Russian crypto investors will continue this year.

It is also easy to predict that, most likely, no significant market of cryptoassets will appear in the coming year, despite positive regulation in Russia. The upcoming halving of rewards will make mining less attractive in our country, despite relatively cheap electricity. Therefore, the relevance of legislative legalization of this activity will disappear by itself. Thus, by the end of 2024, our crypt, if it does not qualify for the “Their Morals” category, will be close to this. Cryptocurrency will remain a super-risky way of generating income – due to regulation in the US and Europe, most transactions will take place in the “gray zone”. At the same time, of course, ownership of cryptocurrencies will not be prohibited, and the possibility of withdrawing funds through third countries will remain. It is even possible that large banks will offer relatively convenient schemes for working with crypto through exchanges and banks in friendly countries. But crypto will not have any significant impact on the domestic payment and financial markets in the new year, as in the past.

There will be no breakthrough in the field of digital ruble. At the same time, the absence of such a breakthrough in 2024 is planned: it will be in “pilot” mode. The implementation roadmap should be presented at the beginning of this year. But it is already known that some citizens in authorized banks will be able to open the first digital wallets and transfer the first money. The digital ruble network will expand to several more banks; The first budget transactions through the digital ruble are also planned. Non-financial organizations will be able to connect to the system from 2025. Mass implementation is planned based on the results of passing all stages of the “pilot”, that is, not earlier than 2025, and most likely in 2027.

With the above forecasts it is easy to be considered a retrograde. But the last thing I would like to do is look like a person who denies the progress and inevitability of digitalization of the global financial industry. I am absolutely sure that digital assets, digital currency, digital money are the future. But, given all the risks and contradictions of modern economics and politics, the best strategy for an expert is to be a cautious realist. Therefore, my prediction is that nothing breakthrough will happen in the field of digital currencies, assets, or money in 2024.