Andreessen Horowitz’s (a16z) predictions for next year’s top crypto trends don’t mention Bitcoin at all. They’re not alone; with all the hype around burgeoning ecosystems on Ethereum and Solana, it’s easy to write Bitcoin off as old, obsolete and boring.
This post is part of CoinDesk’s “Crypto 2024” predictions package. Matt Luongo is the CEO of Thesis, a venture studio and auditing firm which has built a family of projects across fintech, DeFi, infrastructure, and zero-knowledge cryptography such as Fold, tBTC, and Embody.
But that would be a mistake. In 2024, the world is going to be reminded of this in a big way. Next year will see the revenge of Bitcoin, for better or for worse.
My ambivalence may surprise you. I haven’t changed my mind about the transformative power of Bitcoin. But 2024 is looking like the year this asset finally breaks into the mainstream in an irreversible way. And the nature of that transition will determine whether the dream of decentralization and self-custody of assets moves closer to reality, or if the Bitcoin “brand” is co-opted as just another product from the likes of Vanguard and Amazon.
The catalyst for this is the impending approval of the first spot bitcoin exchange-traded fund (ETF) in the United States, which is poised to unleash a tidal wave of investment in the world’s oldest cryptocurrency.
Here’s the problem: the inflow of new investors will be people who think they’ve invested in BTC, but never touch anything that actually lives on-chain. These ETFs will be “paper Bitcoin:” a representation, not the real thing, just like a dollar bill isn’t the same thing as gold.
For Bitcoin to succeed on its own terms, it must evolve as a technology, not just a store of value
And there will be no obvious reason for anyone to hold the underlying asset directly. There will be a whole universe of consumer apps letting people buy, sell, trade, lend, borrow — all using synthetic assets that never touch the blockchain.
“Bitcoin” will thrive, but the whole idea behind it, true self-custody, will be dead. How do we avoid a pyrrhic victory of this magnitude? By giving first-time HODLers something to do.
Bitcoin has always been the largest digital asset in terms of market cap. But it has not been the epicenter of innovation for years when…
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