Exchanges have folded. Major players are feeling the regulatory pressure. Binance stopped accepting new UK customers in October and FTX has massively tarnished the industry. The landscape may look very different as soon as the end of 2024.

Despite this, I believe crypto will become more mainstream and serious players, some new and some old, will consolidate. Some clarity will need to be reached on regulation, as central banks are moving ahead with the stablecoin and CBDC launches.

In the UK, the FCA will continue to exercise the financial promotions regime, while the eurozone will push forward with MiCA in an attempt to be ahead of the game.

Is crypto becoming the currency of terrorist financing?

With recent high profile cases – SBF and Binance, crypto’s reputation suffered. Has it lost the opportunity to become a legitimate currency?

Even fiat backed stablecoins have failed to hold peg. See our article on the BIS report.

We enter the post-FTX and Binance era. Those two cases provide the background scenary and soundtrack to the conversation, and the conversation has two main strands.

One will push to seek approval from regulators and tradfi institutions – keep an eye out for that Blackrock spot ETF – ironically seeking to underpin crypto by harnessing the concept of confidence that defi was meant to challenge and replace.

The other strand will argue for ever more complete divergence from regulation and tradfi institutions in pursuit of the libertarian crypto dream.

The recent trend of a regulatory clampdown on crypto and crypto exchanges is set to continue, and (serious) crypto issuers will have to rethink their business model as well as the actual use of their assets.

We will see fewer new crypto products hit the market and there will be a strong preference by traders and investors for working with the most common and well-established ones – if for no other reason than the security of being able to tap adequate liquidity pools when necessary.

Crypto will continue on its merry way, but we may see the first steps to regulating this industry in the same way other gambling operations are already policed.

Crypto has no practical application beyond the taking of risk in the hope of an outsize reward. And it is not backed by anything that constitutes an asset or that has intrinsic worth.

The big promise of crypto and the distributed ledger was its imperviousness to being compromised. And that has proven to be a complete confidence trick.

And the proponents of crypto invariably simply cover their ears when questions come up about crypto’s contribution to the financing of crime, terrorism and tyranny.