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2024’s Top 5 Crypto and Travel Rule Predictions

2024’s Top 5 Crypto and Travel Rule Predictions

20 Dec, 2023

2024 is expected to produce notable developments within the ecosystem. Below, we delve into the anticipated shifts of this landscapePredictions include the Financial Action Task Force (FATF) providing regulatory clarity on stablecoins and non-fungible tokens (NFTs), further implementation of enhanced security measures and privacy features for virtual asset service providers (VASPs) and customers, an increase in bitcoin ownership and adoption as local currencies, the rise of crypto ETFs and the potential resurgence of the crypto millionaire. 

2024’s Top 5 Crypto and Travel Rule Predictions

1. Stablecoin and NFT Regulatory Clarity from the FATF 

In 2023, we saw the UK, Dubai, and Hong Kong implement their variation of the Travel Rule. Moreover, regions like Turkey and Spain have hinted at Travel Rule adoption by early 2024.  Travel Rule adoption is happening. However, there are still gaps in the general regulation of stablecoins and NFTs. 

In some regions - like the EU - clear definitions and explanations are provided on how to regulate these assets. However, most regions are still uncertain about how to mitigate the associated risks. 

Read: Stablecoins Are No More: MiCA’s EMTs and ARTs Explained.

The FATF has explained that while there has been a decrease in the risks that NFTs present, they are still a potential risk area for money laundering. Regions with advanced regulations monitor NFTs as virtual assets, yet other regions are still in limbo regarding how to regulate them due to their various use cases. For example, NFTs can function as cultural objects, tokenised versions of tangible goods like real estate.

In their 2023 Targeted Update on Implementation of the FATF Standards on Virtual Assets/VASPs, the FATF explains that both stablecoins and NFTs will be studied further and monitored to establish a way forward. 

2. Enhanced Security Measures and Privacy Features 

Trust in the ecosystem is built on two elements: security and privacy. 2023 witnessed a staggering $12 billion in losses attributed to cryptocurrency-related frauds, underscoring substantial cybersecurity challenges.

With the growing implementation of the Travel Rule (where VASPs are mandated to exchange and store delicate customer information), crypto users and VASPs have had growing concerns regarding data privacy and safety.

Some VASPs have worked towards data privacy and safety by implementing reliable Travel Rule solutions and other blockchain tools, but this is only sometimes foolproof. It is expected that exchanges will continue to heighten their security measures to reduce security breaches and to comply with the Travel Rule. 

To operate a seamless system in the crypto domain, it is imperative to eliminate threats to the security of systems and data privacy. The importance of security and privacy cannot be overstated for VASPs and users alike. 

3. Increase in Bitcoin Ownership and Adoption

Following its success in 2023, bitcoin is expected to continue with its upward trajectory. With that, individual bitcoin ownership and its adoption as a local currency are expected to increase. 

It is speculated that with the increase in Travel Rule adoption, users looking to invest in bitcoin will feel more confident due to the security measures it brings. As per Crealogix’s study, Switzerland is an example of such a region.  Switzerland implemented its Travel Rule in 2019 and has since seen an increase in crypto investments; 67% of Switzerland’s population has invested in crypto.

Additionally, regions that lack currency stability are turning to bitcoin as a solution. El Salvador and the Central African Republic are examples of this. 

Moreover, with openly pro-bitcoin politicians like Argentina’s Javier Milei, bitcoin adoption as a local currency is imminent. The country has also insinuated that its energy producer, YPF would consider bitcoin mining using stranded methane and gas.   

BTC Cycle (Bloomberg and VanEck)
Bitcoin Performance 2009 - 2025 (Bloomberg and VanEck)

4. An Overall Increase in Crypto ETFs

2024 will see an increase in exchange-traded funds (ETFs) in general, but the spot bitcoin ETF will trump its peers and be the most successful ETF launched. 

Bloomberg's analysts specialising in ETFs indicate a high likelihood (about 90%) of approval for a spot bitcoin ETF in early 2024.  However, it is essential to note that to exert a substantial impact on the market, the ETF must attract considerable assets. Bitwise has predicted that spot bitcoin ETFs could secure approximately 1% of the $7.2 trillion US ETF market, equivalent to $72 billion, within the next five years.

5. The Return of the Crypto Millionaire 

Following the spike in bitcoin, investors reclaiming their millionaire status have set a trend that is expected to persist in 2024. Buoyed by optimistic predictions for bitcoin's trajectory, investors are expressing bullish sentiments, leading to increased investments. 

Finews has reported that Bitcoin Suisse, in particular, reports direct impacts from this trend, showcasing steady growth and exemplifying the return of the crypto millionaire.

Parting Thoughts 

In conclusion, the concerted efforts towards regulatory clarity, particularly in stablecoins and NFTs, underscore a maturing industry that seeks to balance innovation with responsible governance. Enhanced security measures and a heightened focus on privacy address immediate concerns and pave the way for user trust and acceptance.

Bitcoin is expected to continue its upward trajectory. Increased adoption as a local currency and a surge in individual ownership signifies a broader acceptance of digital assets globally. The anticipation of a spot bitcoin ETF signals further institutional integration, bringing substantial assets into the market. The return of the crypto millionaire reflects confidence in the crypto space. 

2024 suggests that innovation, regulation, and widespread adoption are afoot, which will lead to the further evolution of the ecosystem. 

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