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J'JO Summary: Crypto Market In 2023 With Trends For 2024

Why it matters to you:
A summary of the most significant events makes you understand the connections between these events and market fluctuations. Knowing that, you can assume how the coming events in 2024 can influence the market, do more research and make more weighted investment decisions.

It's quite hard to include 2023 in the list of best years for the crypto market, but a series of events have occurred – and are still ongoing – which can provide a strong impetus for further development.

Against the backdrop of a challenging global economic situation, the total cap of the cryptocurrency market has grown, reaching over $1.4 trillion (+70% on a year-to-year basis), and the number of cryptocurrency users has increased to approximately 575 million.

The main industry driving events took place in Q 3-4 of the year – one of them was Grayscale's victory against the SEC regarding the conversion of the Grayscale Bitcoin Trust (GBTC) into an ETF. The others were applications from major financial players such as BlackRock, Fidelity, and others for spot Bitcoin ETFs. Numerous false starts, fakes and FUD surrounding these anticipated events happened over the past few months. The final approval, which only took place in January 2024, may serve as a starting point for a new price surge in the market.

What else marked the year? Here are major events that influenced the current state of the crypto market:

  • Technological competition of blockchains: The effort to provide the market with the best product has influenced investor choices, audience growth, and entire ecosystems as a whole.

  • Hype around artificial intelligence and related projects: this fueled the increase in the value of several cryptocurrencies.

  • Legal proceedings, initiatives, fines and penalties: these, to a large extent, have been exerting pressure on the market.

Cryptocurrencies that experienced growth in 2023

A 70% overall market growth is already a significant figure, but certain projects demonstrated much more substantial achievements.

Solana (SOL) made a powerful leap into the top tier list with a growth of over 900%. Other excellent results in the top-20 were reached by Avalanche (260%), Cardano (147%), Polkadot (96%), and Tron (90%). It's worth noting that Solana's technological solutions and the increasing popularity of its blockchain were the reasons behind its success. Despite diverse criticism, more projects are being launched on Solana, and by the end of 2023, this ecosystem can rightfully be called the main competitor to Ethereum.

+9600%

Performance of BONK by the end of the year

As usual, the crypto market saw the emergence of new hyped projects offering early investors phenomenal returns. The most explosive was the new meme coin, BONK, with an increase of over 9600%. The year was marked by cryptocurrencies associated with AI technologies, notably Injective, with a growth of 3000%. Tellor Tributes (2200%), Kaspa (2100%), and Render (1000%) also ranked among the best in terms of return on investment. Users who invested in the J'JO AI index made profits with help from this segment.

AI as a Growth Catalyst

2023 proved to be a pivotal year for generative artificial intelligence (AI), primarily due to the launch of ChatGPT and subsequently its counterparts. Technological giants such as Google and Meta also entered the competitive arena.

Industry experts began analyzing potential applications of AI-generated content in Web3. For instance, generative AI could assist in tasks related to design, code and gaming development, and smart contracts, in the NFT space, asset trading, and many other domains.

Due to the hype surrounding artificial intelligence, the market capitalization of AI-related tokens surged from $8 billion at the beginning of 2023 to over $30 billion by its end.

It's worth noting that the J'JO AI index, launched in early September and comprising the top 10 performing AI assets, performed excellently. Investors who recognized the industry's potential and the index's opportunities achieved high ROI – the exact metrics can be viewed in the dashboard of personal account on the J'JO website.

Regulatory Pressure: Market Resists with All Its Might

Not everything was smooth sailing: regulatory actions played a crucial role in restraining the market development. In 2023, regulatory clarity became a cornerstone, with governments attempting to find balance between fostering innovation, ensuring the stability of financial systems, combating money laundering, and asset taxation. Still, no clarity here.

Against this backdrop, the U.S. Securities and Exchange Commission (SEC) hesitated throughout the year to approve the long-awaited Bitcoin ETF, and this event was postponed, eventually succeeding in January 2024.

Moreover, the legal proceedings against Sam Bankman-Fried, the notorious CEO of collapsed FTX and Alameda Research, remained at the center of attention. Bankman-Fried was found guilty of fraud, but the legal case is still ongoing. In the same year, regulatory scrutiny also targeted such exchanges as Binance, Coinbase, and Kraken. The investigation into the actions of Binance US culminated in an unprecedented fine, also leading to the resignation of CEO Changpeng Zhao. Meanwhile, the legal case between Ripple and the SEC is still unresolved, despite positive rumors. The conclusion of legal proceedings and regulatory clarity will lead more institutional investors into the market, who are not accustomed to risky moves. The influx of these funds will also propel the cryptocurrency market cap to new highs.

Institutional Investments, Derivatives, and New Trends: What Awaits the Cryptocurrency Market in the Near Future

Currently, all industry attention is focused on the approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC). According to Galaxy Digital, this asset class could attract around $79.5 billion over the next three years, impacting the overall crypto market cap. Furthermore, approval for Bitcoin ETFs is likely to be followed by other traded funds – based on Ethereum and similar assets.

According to researchers from Crypto.com and DeFiLlama, the trading volume of DeFi derivatives in the cryptocurrency market last year reached approximately $1.94 trillion, and these volumes were growing from month to month. In 2024, these volumes will presumably increase even more, so that the DeFi market will gain new momentum, and the value of DeFi assets will continue to rise. Security audits and risk assessments are becoming an integral part of user fund protection, attracting more investors to this market. It is also worth noting that this trend should have a positive impact on the J'JO DeFi system index.

Real World Assets (RWA) or "tokenized assets" is another trend that will see development in 2024. According to a report by Boston Consulting Group, the RWA market is likely to reach $16 trillion by 2030. Research by Celent and BNY Mellon confirms that around 91% of institutional investors are interested in tokenized assets. Interest is growing thanks to protocols such as Ondo Finance, Centrifuge, and Tangible. The total volume of assets in RWA protocols as of the end of November 2023 was only $2.8 billion. The potential of this market is enormous, and the J'JO platform will soon explore the possibility of creating a system index based on RWA.

2024 will also be marked by yet another Bitcoin halving. The experience from previous years suggests that shortly after this event, an active bull market begins. Will a similar trend emerge this time? We'll have to wait and see.

It is expected that in 2024, the popularity of index investing in cryptocurrency assets will continue to rise. Many investors are becoming increasingly disillusioned with trading and investing in separate volatile assets, seeking an opportunity for balanced and less risky investment instruments. Currently, several funds already offer their indices, as well as cryptocurrencies whose value is calculated based on a specific basket of cryptocurrencies.

J'JO indices differ from that: any user with a personal account on a cryptocurrency exchange can become an index investor in a safe way. J'JO does not take assets into trust management, which would pose a significant risk to users. The service connects to the spot  trading desk of the exchange and automatically purchases a pre-defined basket of cryptocurrencies which refer to one of the four system indices. Subsequently, the service automatically rebalances the selected  index, removing weaker assets and adding growing ones. This method of index investing is considered one of the least risky, requiring no special knowledge, with an entry threshold ranging from $100 to $3000.

Thus, the results of 2023 have led to a dynamic start for the cryptocurrency market in the new 2024 year. There are many exciting events and the introduction of innovative technological solutions waiting ahead. Stay with J'JO and explore the opportunities of index investing in cryptocurrency assets!

Published: Jan 16, 2024
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Jan 16, 202410 min read
J'JO Summary: Crypto Market In 2023 With Trends For 2024
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