2024 has passed, and on the first day of 2025, we look back at the past and look forward to the future. Let's see what surprises and accidents there are in the cryptocurrency world in 2024? Which opportunities have you seized and which opportunities have you missed? Have we achieved our goals? Are there any regrets?
In 2024, Bitcoin completed its fourth halving, the Federal Reserve began to enter a cycle of interest rate cuts, and the Bitcoin spot ETF was finally approved by the US SEC. These factors combined have brought investors' enthusiasm and expectations for the fourth halving bull market to a peak.
However, the subsequent market trends confused many investors: on the one hand, Bitcoin continued to break new highs, breaking the $100,000 mark several times in December; on the other hand, a number of altcoins represented by ETH continued to stagnate, or even followed the decline but not the rise!
Of course, in this year's market, there are also some tracks such as BRC20 inscriptions, MEME, AI, public chains, RWA, old mainstream coins, etc. that have performed outstandingly. These concepts continue to have currency surges that have attracted the attention of the entire market.
During this year, the world's major political and economic events were particularly numerous and complex. For example, major international events such as the Russia-Ukraine War and the Middle East War continued to impact the cryptocurrency circle, causing short-term surges and plunges, making some people rich and leaving others penniless.
During this year, countries around the world have begun to actively or passively formulate encryption policies to cope with the increasingly surging encryption wave. The encryption policies of Europe, America, the Middle East, East Asia, Southeast Asia and other countries and regions have had an increasingly greater short-term and long-term impact on the currency circle.
Looking back at 2024: Bitcoin completes halving and breaks through the $100,000 mark
At 8:09 (UTC+8) on April 20, 2024, Bitcoin successfully completed its fourth halving at block height 840000, and the network's mining reward was halved from 6.25 BTC to 3.125 BTC.
Before that, in October 2023, Bitcoin officially broke out of the bottom and started a round of 7 consecutive monthly increases. On the eve of the halving, it broke through the high point of the previous bull market and reached more than 73,000 US dollars. Just when the whole market was cheering that the halving bull market would start to go wild, it unexpectedly plummeted in April, the halving month, and fell directly by 20%;
The decline in April not only ended the seven consecutive monthly increases, directly breaking the upward trend, but also swallowed up the gains in March and started a five-month-long volatile decline, falling to a low of more than $49,000; it was not until September that Bitcoin resumed its upward trend, rising for three consecutive months and finally breaking through the $100,000 mark in December. However, the market soon began to fluctuate around $100,000, breaking through and rebounding to the $100,000 mark several times.
Looking back at the logic behind Bitcoin's rise, we can see that this is a bull market caused by the superposition of three important factors: halving, the Federal Reserve's start of a rate cut cycle, and Bitcoin spot ETF.
On January 10, 2024, the US SEC approved 11 Bitcoin spot ETFs from ARK Investments, BlackRock, Fidelity, Invesco, Bitwise, and Grayscale. The launch of Bitcoin spot ETFs has undoubtedly changed the rules of the game for Bitcoin, allowing institutions and large investors to access the world's largest cryptocurrency without directly holding Bitcoin. Currently, 12 Bitcoin spot ETFs and 9 futures ETFs have been approved and listed for trading. As shown below:
The total market value of Bitcoin ETFs currently held has reached US$110.479 billion, and since they were approved, the 12 spot ETFs have been in a state of net capital inflow most of the time. The net inflow of funds has continued to set new highs since the end of October, with an inflow of US$1.359 billion on November 7, setting a historical high. During this period, Bitcoin also continued to reach new highs, until it broke through US$100,000 in early December.
Judging from historical data, the amount of net inflow of funds is basically proportional to the increase in the price of Bitcoin. It can be seen that the passage of Bitcoin spot ETF has a great effect on boosting the price of Bitcoin. However, this also has another consequence: the new funds flowing into the market are all heading for Bitcoin, and most of these funds are also deposited in Bitcoin.
This has led to Bitcoin being the only one to perform for most of 2024. Other altcoins, without the capital spillover effect of Bitcoin, have not risen to new highs with Bitcoin, and many of them have not even moved out of the bottom range. This shows that in the current currency circle, only Bitcoin is a truly breakout asset, breaking the cognitive barriers between the crypto world and the real world, and gaining unanimous recognition from both inside and outside the circle. Although this is conducive to the rise of Bitcoin, it also exposes the fragility of the currency circle itself. There is no second truly money-making currency that can attract external funds into the circle, and the market is supported by Bitcoin alone.
Of course, Bitcoin will be able to break through the $100,000 mark in 2024. In addition to the support of spot ETFs, there is also the expectation of the Federal Reserve's interest rate cuts and halving. The issue of interest rate cuts will be discussed in detail below. Here I will mainly talk about the increasing consensus formed by the Bitcoin halving market, because this is related to the ups and downs of the market.
This is the fourth halving of Bitcoin. Because of the support of the bull market in the first three halvings, many people believe that this round of halving is not easy. On the one hand, it has strengthened the consensus of Bitcoin and is conducive to rising prices, but on the other hand, it has greatly increased the difficulty of the main force to clean up the market. We have said in the original article: Bitcoin fell three times by 10,000 points in one month, cut losses or buy at the bottom? that because the consensus of Bitcoin's four halvings is too strong and it is too difficult to clean up the market, the main force has to use all means to clean up the market, such as the December cleanup, which saw three 10,000-point drops in a short period of time, repeatedly ravaging the market and making retail investors give up resistance and hand over their chips.
Not only did it cut the value of a number of altcoins in half, but it also caused nearly 1 million investors to go bankrupt. In other words, as the consensus on Bitcoin's multiple halvings grows stronger, the cruelty of this market is becoming more and more intense, and the means of cleaning the market are becoming more and more diverse and torturous. We must have a clear understanding and mental preparation for this basic situation.
Looking back at 2024: When will the altcoin season come? When will mainstream currencies break new highs?
As mentioned above, while Bitcoin continued to break new highs in 2024, a number of altcoins performed poorly, falling but not rising, so much so that many people shouted that there is no altcoin season, only a bull market for Bitcoin.
The severity of this situation can be seen from the difference between the current mainstream currencies and their historical highs: ETH is -30% away from its historical high, BNB is -11%, DOGE is -57%, ADA is -71%, TRX is -40%, and AVAX is -74%.
Even the currencies that performed strongly in 2024 are still some distance away from their historical highs, such as: XRP is -43% away from its historical high, SOL is -28%, PEPE is -36%, and AAVE is -49%.
The performance of old mainstream currencies is also as bad as it can be. For example, BCH is -89% away from its historical high, LTC is -75%, XLM is -62%, and LINK is -56%. This is the result after a round of increases at the end of the year.
The performance of many popular currencies in the last bull market is even worse. For example, ICP is -99% from its historical high, FIL is -98%, DOT is -87%, and UNI is -69%.
It can be said that while Bitcoin continues to break new historical highs, the performance of a number of altcoins is so poor, which is unprecedented in the first three rounds of halving bull markets. The main reason is that there is too little money in the market, that is, the money that flows into the market after the Fed’s interest rate cut has just flowed into the cryptocurrency market through banks, bond markets, stock markets, and housing markets, and has been poured into Bitcoin through ETFs, which has inflated Bitcoin and then overflowed with a large amount of money to pour into other currencies.
In the previous article: Bitcoin breaks record high again, altcoins continue to fall! What should we do next? It was also said that institutions are currently focusing on Bitcoin, and the narrative of altcoins is not enough to attract old money to enter; moreover, the current sluggish and uncertain political and economic environment has led most investors to adopt a conservative strategy, and of course, investing in Bitcoin is the safest.
In this case, is there really no alt season in this bull market? I think it is just the opposite. The current Bitcoin bull market is turning to the alt season. Whether it is the bottoming out of the alt season index, or the changes in the market conditions and market sentiment, they all point to the arrival of the alt season.
Since October, the Greed Fear Index has been above 50. Even after three 10,000-point plunges in December, this value is still biased towards greed. In other words, market sentiment continues to be high, which is one of the basic conditions for the arrival of the altcoin season. Only with market FOMO can altcoins continue to rise and reach new highs.
Judging from historical trends, it is now exactly the 8th month after the halving, and the altcoin season is just about to break out; moreover, the current Fed rate cut cycle is still continuing. All these factors are pointing to the arrival of the altcoin season.
Judging from the performance of ETH, the bellwether of the altcoin season, ETH has already broken through the high point of the March bull market in December. Although it was brought down by Bitcoin, it also shows that the progress of the altcoin season has reached a critical node. Judging from the current market conditions, ETH may exceed its historical high price before March 2025. By then, other altcoins may also rise one after another and exceed their historical highs one after another.
Looking back at 2024: The Fed has entered a rate cut cycle, but the market performance is not as expected
The Federal Reserve’s interest rate cut has contributed greatly to Bitcoin’s breakthrough of $100,000 in 2024. This is also one of the most important bases for the market to judge the bull market. However, since the Federal Reserve cut interest rates by 50 basis points in September, it has cut interest rates three times, a total of 100 basis points, but the market performance has not been as expected, especially the performance of altcoins, which does not look like a bull market at all. Why is this?
The above article talked about the flow path of the money from the interest rate cut. Here are some other reasons. The first reason is that the marginal effect of interest rate cuts is diminishing, that is, the initial interest rate cuts often trigger a strong market reaction, but as the number of interest rate cuts increases, the market's sensitivity to the policy gradually decreases. All investment markets are based on speculation expectations. Before the good news is implemented, the emotions are the most enthusiastic and anticipated. After multiple implementations, if there is no greater stimulus, then the sensitivity is not that great.
The second reason is that there is great uncertainty in the current macro-economy. This is also the reason why the market plummeted when the Federal Reserve cut interest rates by 25 basis points in the early morning of December 19. This was mainly because the US economic data was mixed and market sentiment tended to be cautious. Therefore, Federal Reserve Chairman Powell released an "eagle" tone in his subsequent speech, and there were voices calling for a slowdown in the pace of interest rate cuts.
The third reason is the uncertainty of global crypto policies. For example, although Europe has implemented the MiCA regulations and it officially came into effect on June 30 this year, the transition period will not end until June 30, 2026, and the implementation details are still being adjusted, and the policy dividends have not been fully released; and the United States has been controversial about its tax policy on the crypto industry, which has suppressed investors' enthusiasm. In this case, large funds will be more cautious in their investment attitude, and it is difficult for altcoins to gain much recognition.
It can be said that the Fed’s rate cut is not the only determinant of the bull market. The Fed’s rate cut has indeed created conditions for the market, but the performance of the cryptocurrency market is also affected by multiple factors such as technological progress, policy support, and capital flow. At present, we need to look at the market rotation in stages. Only after Bitcoin has risen can the altcoins catch up.
Overall, the Fed’s interest rate cut did play a crucial role in Bitcoin’s breakthrough of $100,000 in 2024, but the market’s performance that was worse than expected reflected macroeconomic uncertainty, the complexity of the policy environment, and the market’s inherent need for adjustments.
Looking back at 2024: Severe differentiation between strong and weak currencies, strong concept currencies take turns to perform
In 2024, the cryptocurrency circle showed obvious track differentiation. Most concept tracks were lukewarm, but some strong concepts such as BRC20 inscriptions, MEME, AI, public chains, and old mainstream coins took turns to perform.
Inscription and BRC-20 have become a new explosion point for the Bitcoin ecosystem. At the beginning of this bull market, they attracted the attention of most investors, and ORDI, SATS, RATS and other projects experienced a 10-fold or even 30-fold surge; these projects, with the security and decentralization of the Bitcoin network and the gimmick of the Bitcoin ecosystem, attracted a large number of developers and funds.
Although the Ordinals protocol has further activated the expansion potential of Bitcoin, and the simplicity and ease of use of the BRC20 standard has lowered the development threshold, the high transaction fees and network congestion problems of the Bitcoin network itself remain unresolved. This is also the reason why many investors are not interested in this track. There is still a lot of controversy over the quality of the Bitcoin ecosystem.
The MEME track is full of enthusiasm and bubbles. The MEME concept, brought about by Musk's call for DOGE, has performed particularly well in this round of market, and is even the hottest concept in terms of positions for a period of time. Many MEME currencies such as PEPE, PENGU, SHIB, BONK, FLOKI, PNUT, etc. have emerged. However, compared with the craze in 2021, this year's MEME track is more rational, and many investors have gradually realized its short-term speculative nature. The prices of most projects have fallen sharply after the craze subsided.
AI and blockchain, the integration of technology and value. The track combining AI and blockchain continues to heat up and is one of the most promising tracks in this round of halving. The application of AI-driven decentralized protocols and smart contracts has become a focus of the market; FET, AGIX, WLD, AI and other currencies have seen good growth in different periods. AI tools are used to optimize trading strategies, predict market trends, and improve the efficiency of NFT generation and application. The AI track has attracted a lot of venture capital in this round of market, showing strong growth potential.
RWA (Real World Assets), real-world assets on the blockchain. It was a concept that was popular at the beginning of this round of market, and is considered an important breakthrough in the DeFi field. For example, real-world assets such as real estate and bonds can be tokenized through blockchain, which not only broadens the application scenarios of DeFi, but also provides an entry point for traditional financial institutions to participate in the currency circle. However, the development of this track still faces regulatory and legal challenges. At present, related concept currencies such as ONDO, SNX, USUAL, and RSR have also performed well, but they are still a long way from real explosion and landing.
In the public chain track, the old and the new are replaced, and the competition is fierce. ETH is still the leader, but emerging public chains such as SOL, APT, SUI, TIA, etc. have achieved rapid rise by relying on performance advantages and innovative ecology. Other old public chains such as ADA, TRX, AVAX, DOT, MATIC, NEAR, etc. have also performed well. It can be said that in every bull market, there will be public chain projects that rise, and the upper limit is very high. Basically, the rise is one of the top ten in market value.
Old mainstream coins, old trees bloom new flowers. In the fourth quarter of 2024, a number of old mainstream coins such as BCH, LTC, XRP, XLM, LINK, etc. have exploded one after another, subverting the concept of "speculating on new but not old". This is mainly because the "old money" of institutions currently entering the market pays more attention to risk control than to yield. Therefore, after these institutional funds pushed up Bitcoin, some of the overflow almost went to mainstream coins that have been tested by the market. This also reminds us of the limitations of historical experience.
The differentiation of tracks in 2024 reflects the structural changes in the flow of market funds and the shift in investor preferences. The performance of strong tracks such as BRC20 inscriptions, MEME, AI, and public chains shows that projects with strong narratives, practical applications, and technical support can still attract funds and attention. We should pay close attention to changes in market narratives and constantly update our cognition.
Looking back at 2024: Major financial events outside the circle have an increasing impact on the cryptocurrency circle
In 2024, the performance of the cryptocurrency market will not only be driven by factors within the industry, but also the impact of major financial events outside the industry will become increasingly significant. From U.S. economic data to central bank monetary policies to geopolitical situations, these external factors have had a profound impact on price fluctuations, capital flows and investor sentiment in the currency circle.
The main economic data of the United States include PCE, non-farm data, CPI, etc. These data are released on a fixed date every month, for example, non-farm data is released on the first Friday of each month, and CPI is released between the 10th and 15th of each month; because the Federal Reserve's monetary policy relies on these data, the market will adjust liquidity and risk preference expectations based on the data, and each release of data may cause a sharp rise or fall in the market. You can obtain relevant information from the official websites of the U.S. Bureau of Labor Statistics (BLS): www.bls.gov and the U.S. Department of Commerce Bureau of Economic Analysis (BEA): www.bea.gov to help you make investment decisions.
The monetary policies of the Federal Reserve and other central banks are decisive factors affecting this round of halving. For example, the Federal Reserve cut interest rates three times in 2024 (a total of 100 basis points), and the improvement in liquidity directly allowed Bitcoin to break through the new high of $100,000. In 2024, the overall situation is waiting for the implementation of interest rate cuts and the arrival of liquidity after the interest rate cuts, which will take the bull market in the cryptocurrency circle to a higher level.
Other major events, such as the situation between Russia and Ukraine, the Middle East war, the financial crisis and the turmoil in the banking industry, have also caused short-term or long-term impacts on the cryptocurrency market. These major events have led to increased market volatility, and short-term investors need to pay more attention to risk control and market sentiment analysis; long-term investors can pay attention to the support of the macro environment for core assets such as Bitcoin and seize trend opportunities.
In 2024, the impact of financial events outside the crypto world has further deepened, indicating that crypto assets are increasingly closely connected with the global economic system. Factors such as the Fed's interest rate cuts, geopolitical conflicts, and financial crises have boosted the performance of core assets such as Bitcoin, but have also increased market volatility.
In the future, investors need to pay more attention to macroeconomic indicators, policy changes, and regional market opportunities, and combine external financial events with crypto industry trends in order to better cope with market uncertainties and seize potential growth opportunities.
Looking back at 2024 VI: The impact of crypto regulations and policies around the world on the cryptocurrency world
In 2024, the regulatory and policy attitudes towards cryptocurrencies in Europe, America, the Middle East, East Asia, and Southeast Asia played an important role in the cryptocurrency circle. The policies in these regions not only directly affect the flow of funds, market sentiment, and project development, but also shape the long-term pattern of the industry.
In the United States, mainly due to the loose monetary policy of the Federal Reserve and the approval of the Bitcoin spot ETF, the crypto asset market has benefited significantly; in addition, tax supervision has increased, especially for capital gains tax and cross-border transactions of crypto assets; the stable currency regulatory framework has gradually has been implemented, but altcoins are subject to greater restrictions.
In Europe, the MiCA regulation (Markets in Crypto-Assets Act) will be fully implemented in 2024, providing a clear compliance framework for crypto-asset transactions and services in the EU, focusing on user protection and anti-money laundering (AML) measures, but open to innovative projects. After the introduction of the MiCA regulation, some non-compliant platforms and assets were cleared, and market trading volume declined in the short term. However, the enhanced compliance and stability of the cryptocurrency circle will help attract more traditional financial institutions and long-term investors to enter the European market.
In the Middle East, the UAE continues to promote crypto-friendly policies, with the Dubai International Financial Center (DIFC) and Abu Dhabi Global Market (ADGM) becoming regional hubs for crypto assets. The Middle East could become an important innovation center for the global crypto industry, with a demonstration effect on technology research and development and compliance frameworks.
In East Asia, Japan has maintained an open attitude towards the regulation of crypto assets and continued to support institutional development. It has introduced clear tax incentives to encourage companies and investors to participate in the cryptocurrency circle, which has attracted a large amount of trading volume to flow back, and Japanese exchanges have been active.
The South Korean government has strengthened regulation of the cryptocurrency industry through taxation and compliance requirements, while supporting the development of blockchain technology. This has enhanced market transparency, but has reduced speculation in high-risk assets in the short term. In the long run, South Korea may promote more innovative crypto projects by combining blockchain with artificial intelligence technology.
China still prohibits most crypto asset transactions, but it has increased its support for blockchain technology and central bank digital currency (CBDC). Cryptocurrency activities have shifted to Hong Kong, Singapore and other places. However, China may indirectly affect the structure of the global cryptocurrency circle through the global promotion of CBDC.
In Southeast Asia, Singapore continues to maintain crypto-friendly policies, emphasizing investor protection and compliance, and has become the operating center for many crypto asset funds and projects. Singapore may consolidate its position as the crypto asset center in Asia and drive regional innovation in the future.
Emerging markets such as Thailand, Indonesia, and Malaysia have a more relaxed attitude towards crypto assets and focus on developing the application of blockchain technology in financial inclusion and payment, which makes Southeast Asia an important market for DeFi and GameFi projects.
In summary, the crypto policies of various regions will make them play different roles in the crypto market. For example, stricter regulations and tax policies in Europe and the United States have restricted short-term speculative behavior, but attracted more institutional funds; friendly policies in the Middle East and Southeast Asia have attracted project migration and capital inflows; Japan and South Korea have strengthened the stability and attractiveness of the regional market through policy preferences and technical support.
In the long run, different encryption policies in different countries will intensify competition between regions. For example, the Middle East and Southeast Asia will compete for the position of innovation center. But it will also make the industry more standardized. The compliance policies of Europe, the United States and East Asia will set standards for the global market and promote the entire industry to develop towards mainstream and institutionalization. Some policy-friendly regions will attract more technological innovation and project incubation, which will have a profound impact on the global encryption industry.
Summarize
2024 is a turbulent year for the cryptocurrency industry. Whether it is the continuous record highs of Bitcoin, the rise of popular tracks, or the impact of macroeconomics and geopolitics, the cryptocurrency industry has demonstrated strong adaptability and innovation. Looking ahead, with the gradual improvement of the regulatory framework and the continuous iteration of technology, the cryptocurrency industry will continue to attract more capital and participants, and embark on a more diversified development journey.
All of the above constitute the turbulent 2024! Just as the British writer Dickens wrote in "A Tale of Two Cities": It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were going straight to Heaven, we were going straight to Hell.
This passage is a vivid description of the world 165 years ago. 165 years later, with tremendous changes and technological advancement, the world seems to have changed a lot, yet it also seems that nothing has changed, because human nature has never changed!
Finally, please allow me to end my review of 2024 with Dou Wei’s (Advanced Animal):
Contradiction, hypocrisy, greed, deception
Fantasy Doubt Simple Changeable
Strong, helpless, lonely, fragile
Tolerance Angry Complex Hate
Jealousy, insidiousness, competition, complaints
Selfish, boring, perverted, adventurous
Lustful Kindness Philanthropy Sophistry
Can speak emptiness sincerity money
Oh~~Roar Advanced Animals
Hell and heaven are both on earth
Great Small Mediocre Poor
Joy Pain War Peace
Brilliant, dim, proud, sad
resentment revenge tyranny blame
Where is happiness?
Where is happiness?
Where is happiness?