In 2024, the digital assets industry is experiencing various events that will and are positively impacting the market. Firstly, the market witnessed the approval of the Bitcoin spot ETF, this financial instrument has attracted a net flow of billions of dollars, causing the broader market to surge. Now for the first time, the industry has professional access to the wider financial sector, allowing more investors to access the market.
Secondly, in April, Bitcoin completed its fourth Bitcoin Halving, decreasing its daily emission from ~900 Bitcoin to 450. This event increases Bitcoin's scarcity and as the new supply decreases, and demand remains the same or increases, this will typically result in a price increase. As a result, the broader market follows suit.
Lastly, financial markets are anticipating the first interest rate cuts after a historic hiking campaign. This is expected to relieve tensions and create the possibility of a risk-on approach, favoring stocks and digital assets. Read more about the chances in 2024 in our brief investment thesis.
Over the past years, the stance towards digital assets has changed. Where the majority of investors first saw these assets as speculative, the market witnessed a shift. Despite its fluctuating cycles, the market continued to attract users, with almost 500 million people owning digital assets worldwide. This continued adoption states that digital assets aren’t short-term hype but are here to stay.
Even institutions such as the International Monetary Fund have stated: “Digital assets are here to stay, and governments should start thinking about the infrastructure behind these digital assets.
In 2009, Bitcoin was launched, starting a revolution only a few initially understood its full potential. Fifteen years later, the digital assets industry comprises thousands of assets and is still considered an emerging class. However, with its rapid pace of adoption and a market capitalization of $2,5 trillion, the industry will soon mature, leading to a diminishing of the incredible performance witnessed over the last decade.
Although there will be enough time to invest in digital assets, we believe that 2024 will present one of the biggest genuine opportunities to invest in digital assets.
In the coming decades, older generations will pass their wealth and assets to their heirs, changing the wealth landscape significantly. These younger, "digital native" generations invest very differently from their parents and grandparents, showing a much higher interest in Bitcoin and digital assets.
In addition to the incredible results digital assets can offer when holding the right positions, they provide even more. Small positions of 1% - 5% have proven to improve the risk-reward ratios of traditional portfolios.
Furthermore, they offer exposure to an asset class that is technologically and innovation-driven, with a sole focus on the digital economy, which will only continue to increase. In our opinion, these assets offer greater performance and future-proofing as we move towards an increasingly digital economy.