Biggest Crypto Trends to Watch for in 2024

Sergey Nazarov, co-founder of Chainlink, joined TradeTalks to share the biggest crypto trends to watch for in 2024.

Which trends in the crypto industry are you most excited about for next year?

The tokenization of Real-World Assets (RWAs) has the potential to bring hundreds of trillions of dollars onchain and transform both the crypto and financial industries. However, once tokenized assets move onchain, they will need the functionality to be securely transferred cross-chain, be enriched with real-world information like price data, and be connected to offchain compute regardless of which chain they’re on.

Chainlink is the only solution that brings cross-chain functionality and all of the world’s data and compute to tokenized assets, which is a big reason why some of the world’s largest financial institutions like SwiftDTCCANZ, and more are actively working with us to see how the Cross-Chain Interoperability Protocol (CCIP) can help make mainstream RWA a reality.

The world’s largest banks and asset managers are now actively utilizing blockchain technology live in production. The World Bank issued a digital bond on Euroclear’s DLT solution, HSBC tokenized physical gold in its London vault for institutional clients, and BlackRock filed for a spot Ethereum ETF while the Bank of England proposed a plan to support stablecoins in the broader economy.

This trend towards tokenization is only set to accelerate as institutions scale up blockchain-based markets, tokenize more real-world assets and financial instruments, and enable liquidity to flow between various DLT and existing systems. 

How do you think the crypto industry will evolve in the next decade?

As more institutions and enterprises realize the benefits of asset tokenization, a larger portion of capital markets will utilize onchain infrastructure as the backend for finance to create vastly superior liquidity conditions and unlock a multitude of efficiency gains. The current landscape involves both the public chain ecosystem with DeFi protocols and Web3 projects and the bank chain ecosystem, where more and more of the largest institutions and enterprises in the world will launch one or multiple private chains.

Over the next decade, these two worlds will converge into a single Internet of Contracts that will touch every aspect of society, just like the Internet we know today.

Do you have any unique predictions on the outlook of the crypto industry?

While blockchains are going to underpin the next generation of global finance, they are also going to transform other major industries, such as global trade, insurance and gaming. The demand for verifiable, transparent and user-controlled applications—built on what’s known as the verifiable web—extends far beyond finance. As our recent collaboration with Vodafone DAB shows, Chainlink’s technology can be used to connect IoT devices along supply chains and help revolutionize global trade.

What’s the biggest challenge facing the crypto industry today? 

Blockchain interoperability has historically been the single most important challenge for the industry. Tokenization is widely recognized by financial leaders as the next-generation format for assets, and leading institutions are launching their own chains, along with leveraging public chains like Ethereum. This fragmented ecosystem creates islands of trapped liquidity and hampers the massive efficiency gains that blockchain technology can unlock. For this interoperability challenge to be overcome and the full benefits of tokenization to be realized, a universal blockchain interoperability standard needs to be adopted. This is why Chainlink CCIP is seeing increasing interest and adoption both from top Web3 projects like Aave and Synthetix, and large financial institutions like Swift, DTCC, ANZ, and other leading financial institutions.  

What’s a news headline you are keeping an eye on going into the new year? 

I expect there to be events that further exacerbate the growing distrust in news, media, and financial markets because they will reinforce the importance of society moving towards new standards of truth underpinned by verifiable information and systems immune to manipulation—the verifiable web powered by blockchains, smart contracts, and decentralized oracle networks. AI-generated misinformation will be especially important to pay attention to as it can more rapidly create deep and unwarranted fractions in society than ever before. 

This interview originally appeared in our TradeTalks newsletter. Sign up here to access exclusive market analysis by a new industry expert each week. We also spotlight must-see TradeTalks videos from the past week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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