2024 Outlook: Retail participation, driven by Eastern regions such as Korea and Japan, signals a resurgence
by Jack Tan, Co-founder of WOO
The year 2023 has set the crypto industry up for fireworks in 2024! Despite many years of claiming institutional adoption was around the corner, we are finally seeing growing interest across Asia and the issuance of spot ETFs in the United States.
Institutions come to the forefront: We will see the largest institutional investors by AUM, including pension funds, endowments, and sovereign wealth funds make direct allocations to crypto assets. One central bank may even add BTC or ETH to its reserves alongside gold and FX. CME’s market share for futures open interest will continue to rise and remain comparable to global offshore CEXes.
Bullishness emanating from the East: The last cycle had significant participation driven from the West, whether it was Saylor stuffing BTC into Microstrategy’s balance sheet or PayPal slinging shitcoins to millions of retail. However, we believe the next cycle will be driven from the East, with a resurgence of retail participation led by major geographies like Korea, Hong Kong, and Japan. Regions like Korea, Japan, and Singapore remain strict and localized, while Hong Kong has proceeded with a formal licensing regime, which suggests a shift in attitude toward Beijing’s view of the industry. For Taiwan, the regulatory direction is transitioning from a self-regulated industry association to licensed entities supervised by financial watchdogs - all of which points to a growing emphasis on DeFi, as builders will choose to be more compliant with emerging global policies.
DeFi continuing to gain market share: We anticipate DeFi will continue to eat into CeFi’s market share, especially as unfavorable CeFi regulations continue to emerge and innovative solutions in DeFi continue to improve user experience. We have seen a large share of spot volumes move from CeFi to DeFi in 2022 and 2023. We anticipate that perp volumes will follow suit and DeFi perp exchanges will have more than 30% of global daily trading volumes by the end of 2024.
Bitcoin becomes a safe haven asset: We targeted $75K for BTC in early 2024 and believe demand will increase heavily as the ETF and halving narratives combine, leading BTC to develop an additional narrative as a safe haven asset. This could lead to important changes in perception towards crypto assets from both traditional and retail investors.
The 2024 outlook marks a pivotal year for WOO as it navigates the evolving crypto landscape, anticipating Bitcoin's resurgence from winter and positioning itself at the forefront of DeFi innovation and institutional adoption.
WOO 2024 Outlook is FREE and can be downloaded here
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