Benzinga - Bitcoin’s (CRYPTO: BTC) year-to-date performance of 156% gains stood significantly ahead of gains reported by Nasdaq (-11%), S&P 500 (+23%), and Gold (SPDR Gold Trust +9.6%).
What Happened: The year 2023 witnessed a major increase in institutional involvement in cryptocurrencies. Close observers are especially optimistic for 2024, should Spot Bitcoin ETFs get regulatory approval.
Next year is also poised to see new narratives like Ordinals (ways of creating Bitcoin NFTs), the Bitcoin halving event and rapidly growth in on-chain activity.
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Here's a look back at a few 2023 milestones:
- Futures open interest on centralized exchanges rose from $6.07 billion to $11.4 billion.
- The overall derivatives open interest in futures and options instruments have climbed to a significant $32.6 billion as of Dec. 10.
- The total value locked in Real-World Asset (RWA) protocols saw a 700% increase led by rising interest in blockchain applications.
- Digital currencies saw broader adoption by global governments, led by a rise in pilot programs of CBDCs (to 14 from 11 at the start of 2023).
However, the stablecoins market cap ($129 billion) witnessed a drop (-30% from April 2022 high levels).
Meanwhile, digital asset investment products have witnessed a significant uptrend in assets under management (AuM) levels of ETPs and ETFs. On a year-to-date basis, total AuMs have expanded by more than 150% from $19 billion at the end of December 2022 to $49 billion as of Dec. 10. This underscores notable inflows into investment products by institutions.
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Why It Matters: CCData expects the “advancement of Artificial Intelligence (AI), tokenization of real-world assets (RWA), and layer-2 scaling solutions to remain at the forefront.”
Also, a Bitcoin halving event will reduce the rate at which a new BTC is issued. The BTC issuance rate is forecasted at 3.125 BTC (on average every 10 minutes) compared to 6.25 BTC currently.
This event will lead to an extra layer of scarcity for the largest digital asset.
Bitcoin Ordinals function similarly to NFTs but on the Bitcoin blockchain. They have led to significant gains in miner revenue through rapid surge in on-chain speculative activity.
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