IVC 2024 Outlook
As we enter 2024, the cryptocurrency landscape is evolving at an exhilarating pace with dynamic narratives, technological advancements, and shifting investor mindsets.
We expect a continuation of the overall crypto market recovery and optimism from 2023. Catalysts such as the approval of Bitcoin ETFs, anticipated Bitcoin halving in Q2 against a backdrop of increased expectations of dovish monetary policy paves the way for a market rally through increased risk appetites and fresh liquidity from both institutional and retail investors.
Overall, we favor consumer-focused applications over infrastructure in 2024. Many L1 and L2 infrastructure solutions were built over 2020–2023, while newer L1 and L2 infrastructure options still await sustained developer and transaction activity, as improved market sentiment has driven infrastructure valuation to levels that may be considered high. Infrastructure development is by no means complete, 2024 opening with a narrative showdown between modular blockchain vs. monolithic blockchains. Meanwhile, innovative consumer applications with good product-market fit and improved user experiences are bringing users and activity on-chain.
Web3 Games Lead Mass Adoption, and Traditional Gaming Giants Embrace Web3 Strategies
Web3 Gaming / GameFi
After two years of development, we will see the 1H 2024 launch of quality AAA and AA Web3 games, with many operating parallel Web2 and Web3 versions. This dual approach is capturing gamers’ attention and bringing on adoption in the Web3 space. Simultaneously, traditional gaming companies are unveiling their first-party Web3 projects and strategies.
Games players will become accustomed to trading in-game assets, with players’ behavior leading to higher retention rates and longer gameplay lifespan. Web3 game features will enable “poorer” players to spend time on crafting, while “richer” players will use money to buy time, with tokens facilitating the transaction process while rewarding user-generated content (UGC). In addition, ERC-6551 (token-bound accounts) will be adopted in Web3 games.
Artificial Intelligence (AI)
AI will see exponential growth through adoption and integration in games and social media products. More content will be created through generative AI and AI will generally increase overall efficiency.
SocialFi
Decentralized identity (DID) solutions will be applied for better SocialFi products and enable improved reward systems.
Decentralized Physical Infrastructure (DePIN)
The DePIN narrative previously tried with decentralized storage and internet of things networks will be explored with technologies such as content delivery networks and decentralized AI inference computing.
Real World Assets (RWA)
There will be increasing tokenization of RWA that jump started in in 2023, with liquidity brought to tangible assets such as real estate and bonds. Despite past doubts about regulatory or viability concerns for RWAs, more RWA projects working in compliance with regulations. This narrative is worth watching, as it could attract more institutional investment.
Regulatory
There will be continued crypto licensing and regulations from regulatory bodies worldwide. The recent approval of Bitcoin ETFs by the SEC marks a significant milestone, and there is strong anticipation for the approval of ETC ETFs in the near future. It will encourage traditional finance capital to enter the crypto market.
Restaking
Applications or layers similar to Eigenlayer and Lido, will likely be built around staked ETH which benefits from ETH’s security, while addressing slashing risk.
On-Chain Trading Revolution
On-chain trading will proliferate, with telegram bots and web apps seamlessly replacing clunky DEX frontends.
The IVC 2024 Outlook Are Made With The Contribution From
- Akio Tanaka, Partner
- JT Law, Partner
- Ann Chien, Partner
- Richie Jiaravanon, Partner
- George Chu, Portfolio Management
- Clement Chen, Investment Team
- Shawn Chen, Investment Team
- Patrick Liao, Investment Team
Disclaimer: None of the information in this blog constitutes recommendations to buy/sell any cryptocurrency or security. This content does not constitute any financial, investment, legal, tax, or any other advice. You should always do your own research. The content is provided by IVC team for informational purposes only.
