What Will Drive Crypto's Likely 2024 Bull Run?

Easing monetary policies, falling inflation, evolving bitcoin mining difficulty and rising confidence in DeFi are factors that point to a further push for crypto prices.

Decentralized Finance (DeFi) has seen phenomenal growth since its inception, increasing total value locked (TVL) by more than 1,200% in 2021 and surpassing $240 billion in invested assets. While DeFi has since fallen to around $60 billion TVL due to broader macro trends, such as rising inflation, the groundwork is in place for DeFi to reconfigure the foundations of our financial infrastructure in the next cycle of market.

Historically, the return to a bull market develops on a four-year trajectory. This time around, a recovery in 2024 is highly achievable as monetary policy matures and regulatory headwinds ease, which may allow interest rates to come down and allow funding to return to the space. .

This bull market is likely to be fueled by four factors: global inflation under control, renewed confidence in the sustainability of DeFi business models, the migration of at least 50 million crypto holders from the world of centralized exchanges to the world of decentralized apps (there are over 300 million crypto holders worldwide today, mostly through exchanges), and, potentially, the next change in Bitcoin mining difficulty (BTC ).

Source: DeFi Llama< /figure>

Everyone is wondering where users and developers should turn next to seize opportunities. Will the next cycle repeat "DeFi summer" 2020, only bigger and with more users?

A shift towards economic sustainability

Startup founders can no longer rely on "magic internet money". This means that the market is unlikely to return to the levels of trust that allowed the founders of the DeFi protocol to reward early adopters with large amounts of protocol-generated tokens, thereby subsidizing annual returns of over 100%. , or even 1,000% on the invested capital. .

While DeFi protocol tokens will continue to have a role to play, the mi...