This
time
of
year
brims
with
intergenerational
dialogue
and
forward-looking
optimism.
As
a
mother-son
duo
immersed
in
cryptocurrency,
we
recently
explored
the
opportunities
and
challenges
that
crypto
will
encounter
in
2024.
While
our
opinions
diverged
on
topics
like
decentralized
finance,
or
DeFi,
and
the
U.S.
impact
on
global
crypto
adoption,
we
concurred
that
the
coming
year,
though
challenging,
could
be
transformative
for
the
trust
and
growth
of
digital
assets.
A
primary
hurdle
for
crypto
in
the
past
year
has
been
its
tarnished
reputation,
which
we
attribute
to
three
main
factors:
institutional
mistrust
in
digital
assets,
an
unclear
valuation
process
fueling
skepticism
and
an
overemphasis
on
speculative
investment.
This
skepticism
was
mirrored
by
influential
leaders
like
JPMorgan
Chase
CEO
Jamie
Dimon
and
Securities
and
Exchange
Commission
Chair
Gary
Gensler,
who
continue
to
raise
concerns
about
crypto’s
association
with
illegal
activities
and
regulatory
noncompliance.
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Strong
institutional
support
has
been
hampered
by
these
credibility
and
utility
issues.
For
example,
Berkshire
Hathaway’s
negative
stance
on
crypto
contrasts
with
Warren
Buffett’s
early
career,
where
he
invested
in
speculative
pink
sheet
ventures
for
value.
This
hesitation
has
allowed
a
narrative
of
fraud
to
dominate
discussions
about
crypto’s
legitimacy
as
a
valuable
innovation.
We
believe
that
addressing
these
concerns
through
effective
due
diligence,
risk
management
and
a
zero-tolerance
approach
to
fraud
will
significantly
enhance
trust
and
support.
The
recent
enforcement
actions
against
fraudulent
activities
in
the
crypto
sector,
including
the
Binance
and
FTX
cases,
can
be
seen
as
crucial
for
rebuilding
trust.
Regulators’
firm
stance
against
fraud
is
a
net
positive
as
it
makes
way
for
a
more
trustworthy
environment.
This
is
a
sentiment
echoed
by
Congress
with
the
unanimous
passage
of
the
Deploying
American
Blockchains
Act
of
2023,
signaling
growing
support
for
digital
assets.
Looking
to
2024,
two
possible
developments
stand
out.
First,
SEC
approval
of
spot
bitcoin
ETFs
could
stimulate
more
excitement
and
support
for
digital
assets,
clarifying
regulatory
uncertainties
and
valuation
concerns.
The
recent
excitement
about
advancements
in
payment
processing,
particularly
with
the
introduction
of
PayPal’s
U.S.
dollar
stablecoin,
PYUSD,
highlights
the
need
for
clarity.
This
excitement,
however,
was
muddled
due
to
the
competition
with
other
stablecoins
that
have
varying
commitments
to
reserve,
anti-fraud
or
custody
obligations.
A
new
ETF
approval
could
facilitate
the
growth
of
other
blockchain
projects
including
trustworthy
stablecoins.
Second,
the
push
for
modernizing
U.S.
capital
markets’
infrastructure
aligns
with
the
demands
of
digital-native
generations
for
efficiency
and
transparency.
Initiatives
like
the
upcoming
T+1
trade
settlement
deadline
and
Blackrock
CEO
Larry
Fink’s
prediction
of
a
tokenomics-driven
market
future
underscore
this
trend.
We
expect
in
2024
there
will
be
increased
institutional
support
for
use
cases
that
are
designed
to
bring
that
reform,
such
as
Figure‘s
use
of
the
Provenance
blockchain.
In
sum,
our
collective
outlook
for
2024
is
that
the
crypto
community
has
an
opportunity
to
champion
a
narrative
emphasizing
zero
tolerance
for
fraud
and
highlighting
clear
use
cases.
This
approach
could
reshape
perceptions
of
crypto,
fostering
trust
and
setting
the
stage
for
a
year
marked
by
significant
growth
and
innovation.
