Closing out the 2nd Quarter: What’s in store ahead for Q3 of 2024?
The first semester of 2024 has officially closed with all the highs and lows for the DeFI community with expectation for Q3 to be an uncertain one. From the highs of Bitcoin finally breaking its all time high rate at $73,000 to the lows of the corrections that preceded swiftly after. With analyst and predictions zoning on the challenges of the economy that will affect the DeFI Space in Q3, let’s recap on the happening from the first semester and look ahead in 2024.
New Beginnings for the DeFI Space
The year 2024 has approached the 2nd leg of its journey and so far it has been filled with momentous events. The year was predicted to be filled with the rise after the slump of 2022 and 2023 but presented with significant economic challenges that might arise along the way. From Unemployment to Rising Inflation, many countries battle to stabilize the economy after the tightening of the economy throughout the past year.
2024 was also widely known as the “Super Election Year” where many established nations choose to elect their new leaders to steer the ship in the right direction. Countries like India, England and Indonesia have found their new leaders while the impending U.S Elections seems to be the point of reference as all countries await the regulations that the United States will be heading under the Former President Donald Trump or Current Vice President Kamala Harris.
Switching over to the DeFI Space and things have been choppy and bumpy across the 2nd Quarter as most Digital Asset experience correction after hitting its peak in March 2024. Bitcoin and Ethereum trended downwards in April, losing more than 15 percent during the course of the month. Despite the all-time high, the general market cap failed to break the 3 Trillion record set in November of 2021 suggesting a much tighter spread of gains amongst the top 50 ranked digital assets.
Much expectations during the month was directed towards the 4th Bitcoin Halving which took place on 19th April, 2024 as it could be the catalyst for its value to break the 6 Figure mark but it hasn’t been realized yet. April also saw the continuation of the saga between Coinbase and SEC where the regulator filed suit that the company was acting as an unregistered broker and exchange. Coinbase joins the long list of Major Cryptocurrency Exchange and Institutions that was questioned by the SEC throughout the past year.
Moving along the 2nd Quarter of 2024, May brought some fresh air in the framework for Ethereum ETFS as the SEC approved all eight proposed applications to offer Ether ETFs: the VanEck Ethereum Trust, the Grayscale Ethereum Trust, the Bitwise Ethereum ETF, the iShares Ethereum Trust, the ARK 21Shares Ethereum ETF, the Invesco Galaxy Ethereum ETF, the Fidelity Ethereum Fund and the Franklin Ethereum ETF. This concludes the long drawn out discussion after Bitcoin ETFs was approved earlier in Q1 and immediately attention was turned to Solana as the next likely proposed ETFs.
Overall the Month of May has seen a stable recovery for the industry with USDT, BTC and ETH rounding out the top 3 in terms of trading volume across the month. Fresh from the Token 2049, the UAE also boasts a steady growth in terms of the crypto transactions within the country amassing $25 Billion and a forecast in the range of $600 Billion by 2032. While across the European region, the MICA regulations seems to enter the final draft phase before its implementation later in the year and this should bode well with the interest of many European regions in exploring tokenization.
The topic “Real World Asset” remains to be the heading in terms of Tokenization as according to the recent report by Coinbase, tokenized asset value (non-stablecoin, publicly trackable assets only) has reached $3 billion. Amongst the RWA tokenization sector, Gold seems to be the leading asset amassing $! Billion in tokenized commodities with Silver, Platinum & Uranium following the trend. The future of tokenized assets holds immense potential, with forecasts from Boston Consulting Group (BCG) predicting a staggering $16 trillion market by 2030 representing a close to 10% of global GDP.
Ending the 2nd Quarter of 2024, June was a dynamic month for the crypto world with significant advancement and developments along the way. While Bitcoin and Ether faces volatility along the month, with both digital assets nearing its all time high but only to peel back due to the constricting economy. With the FED holding a “higher for longer” rate, much of the Bitcoin and Ether ETFs experienced Net Outflows as investors sought to recoup towards safer assets.
While the U.S Elections draws near, the DeFI Space also continues to be a topic of interest for both of the candidates seeking advantage over the growing community as Former President Donald Trump became the first candidate to receive campaign donations in the form of Crypto. Memecoins, a phenomenon which originated in 2021 still remains a popular narrative in Q2 2024 outperforming Artificial Intelligence according to Coingecko Web Traffic report with Pepecoins leading the charge.
FInally moving to the Decentralized side of the ecosystem, DeFI continues to expand in Q2 of 2024 with Decentralized Exchanges recording $370.7 billion in spot trading volume and a 15.7% increase on Quarterly basis. Uniswap seems to be the dominant force ending June 2024 with a 48% market share with Thruster becoming the top gainer in 2024. Overall Q2 has been a stern realization from the predictions made in the first Quarter but leaving a lot to be excited for in the next leg of the year.
Looking ahead in 2024
While the buzz around the world has been about “Artificial Intelligence” and how tech giants are jumping on the opportunity to win the Battle of A.I, some of the attention has been moving away from the DeFI Space. Part of this lack of enthusiasm was external factors such as tightening the economy and unclear regulations but most of it also came from the inside such as the wrong method of adoption and speculations.
The focus for the rest of 2024 will be to re-engage the community with breakthrough innovations and stabilize the industry. The impending rate cut from the Federal Reserve should also provide a massive boost for inflows to Risk — On assets such as Cryptocurrencies and DeFI as investors seek for more favorable returns. These inflows would not be as influential as during the Pandemic era but should predictably rejuvenate the outlook for the DeFI Space.
These inflows might not be a given as the DeFI Space will have to compete with Artificial Intelligence as shares for companies such as NVIDIA and META are commodities for investors. With the increased interest in tokenization of RWAs and Blockchain, it is predicted for the space to maintain its trajectory towards the end of 2024 with growth expected to arise in Q4 of 2024 or the beginning of 2025 as the economy eases its path.
All in all, the first semester of 2024 has been filled with amazing highs and recoverable lows while more development arises within the DeFI Space. With the highlights such as NFT making a comeback in 2024 and the RWA sector that keeps on growing while encompassing many different sectors of assets, things can possibly be looking up in the next quarter. The question is which innovators will make the revolutionary leap forward?
We at Nagaya Technologies certainly believe that there is a huge potential to be found in the DeFI space. We hope that the development going around the world would be able to help to nurture growth for the rest of 2024 and beyond. That is also why we created the world’s first hybrid digital assets called Nagaya which is a part of the revolution needed towards sustainable Digital Assets for the Global DeFI space. Interested to know more about Nagaya, you can visit our website at www.nagaya.co
Or you can talk to us at t.me/nagayaofficial
