Author: Tuo Luo Finance
For the crypto industry, 2024 is a year of turbulence. During this year, cryptocurrencies entered a path of mainstream elevation, with institutionalization, compliance, and politicization becoming the core narratives. Bitcoin's rise to $100,000 announced the end of the crypto market's stigmatization, with digital gold shining, and a new cycle slowly unfurling.
However, crypto is far more than just Bitcoin, and the market is not solely dependent on institutions. The shift in focus records the year's changes; Bitcoin dazzles on stage, but is not always the main character. In each month of this year, the crypto market welcomed new topics and headlines, with technology, projects, communities, and individuals making their appearances, interweaving through the ups and downs of 2024, and writing colorful footnotes for the arrival of 2025.
Looking back at the old year and welcoming the new year, the crypto market remains a hidden dragon in the depths, with unlimited potential for the future.
In January, the Bitcoin spot ETF was approved.
In January, the spot ETF officially brought institutions aboard the Noah's Ark of the crypto world. On January 10, the SEC announced that 11 spot Bitcoin ETFs were officially approved for listing, with approved issuers including Grayscale, Bitwise, Hashdex, iShares, Valkyrie, Ark 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, and Franklin.
For the crypto market, Bitcoin ETFs are undoubtedly a historic milestone. After a decade-long battle with the SEC, the crypto world finally gained regulatory recognition, marking a new chapter for the digital asset market. Subsequently, Bitcoin was officially recognized as a legitimate and compliant investment product, leading to massive capital influx from traditional institutions, further propelling the compliant development of the crypto market.
As of December 31, according to Coinglass and SOSOvalue data, the cumulative inflow of Bitcoin ETFs reached $35.27 billion, with total net assets exceeding $109.532 billion. However, with the continuous growth of Bitcoin ETFs, institutionalization has replaced the miners who once dominated, becoming the controllers of Bitcoin prices. This shift in era may indeed be the case.
In March, Ethereum's Cancun upgrade took place.
After a relatively uneventful New Year in February, March saw Bitcoin and Ethereum back in the spotlight. With the influx of ETFs, Bitcoin's price continued to rise, successfully breaking through $70,000 on March 8, setting a new historical high in three years. At that time, the market believed that $70,000 was the peak for Bitcoin, not realizing that this was just a silent milestone on the price front.
In contrast, Ethereum, despite a focused narrative, still performed modestly in price. However, as the industry's leader, construction remains the most emphasized theme for Ethereum. On March 13, Ethereum successfully completed the Cancun upgrade, introducing the data unit Blob from Ethereum's scalability solution (protodanksharding), ushering in a new era of reduced fees for Layer 2 solutions.
As of now, all mainstream Layer 2 solutions, including Optimism, Starknet, Base, zkSync, Zora, and Mode, have adopted blobs. Blobscan data shows that since the Cancun upgrade, as of December 30, Ethereum's total block count exceeded 1.2 million, with a total of 2.4 million transactions, utilizing 4.9 million blobs, saving 3008 ETH in gas fees. However, it is worth noting that the liquidity of the L2 networks is fragmented across multiple sub-networks, and the fee reduction of L2 has captured some value from the mainnet, making the competition between Ethereum and L2 increasingly apparent.
In April, Bitcoin halved, and Hong Kong's virtual asset spot ETF was approved.
The most important event in April was the Bitcoin halving. On April 20 at 8:09, Bitcoin successfully completed its fourth halving at block height 840000, reducing the mining reward from 6.25 BTC to 3.125 BTC, with the last halving occurring on May 11, 2020. The impact of halving on price is undoubtedly long-term, particularly affecting mining enterprises as the main force in mining. Mining companies initiated a wave of consolidation, further intensifying the head effect, as leading companies like Marathon, CleanSpark, and Riot raced to boost production capacity, combining high computing power equipment with low energy costs, driving the industry competition to a fever pitch, and some mining companies have already started shifting to the hotter AI field.
Another significant event in April was the approval of Hong Kong's virtual asset spot ETFs. On April 15, the first batch of virtual asset ETFs was publicly announced to be approved, and on April 30, six Hong Kong virtual asset spot ETFs were listed on the Hong Kong Stock Exchange, with Huaxia Fund (Hong Kong), Bosera International, and Harvest International as the main issuers. In fact, following the declaration in December 2022, Hong Kong's Web3 market shifted from hot to cold. Despite frequent policies, the market remained hesitant. The virtual asset ETFs are considered an important milestone for Hong Kong, thus before the announcement, although the market was frequently pessimistic, there remained relative optimism, even believing this move could be a precursor to mainland China's opening. However, the reality dampened spirits; not only were funding channels restricted, but due to compliance costs, the virtual asset spot ETFs compared to similar products in the U.S. had higher rates, with significant differences in fundraising. According to SOSOVALU data, as of December 27, the total net asset value of Hong Kong's Bitcoin spot ETFs was only $409 million, holding approximately 4,290 Bitcoins. As June marked the first anniversary of the implementation of Hong Kong's crypto new regulations, multiple crypto-native exchanges faced failures, raising further doubts in the market. It can be observed that Hong Kong's Web3 still has a long way to go, but with the powerful energy of traditional finance, there is still hope for a turnaround, with stablecoins and RWAs becoming key paths for Hong Kong in 2025.
In May, the Ethereum spot ETF miraculously revived, and CZ faced a risky hearing.
In May, the focus returned to Ethereum. The seemingly hopeless Ethereum spot ETF miraculously revived, becoming this year's dark horse. On May 24, according to official documents, the U.S. Securities and Exchange Commission (SEC) approved the plans for a spot Ethereum ETF from the New York Stock Exchange, Chicago Board Options Exchange, and NASDAQ, specifically the issuer's Ethereum spot ETF 19b-4 (exchange rule change) application. Compared to Bitcoin, the approval of Ethereum's key processes reflects a more noticeable shift in regulatory attitudes, eliminating its historical burden of being categorized as a security, symbolizing a turning point in the openness of U.S. regulation. Other decentralized projects are likely to see regulatory relief, timely rescuing the crypto market from the siphoning effect of Bitcoin. Throughout every bull market, the rise of Ethereum is a key indicator of sector rotation. On July 23, the Ethereum spot ETF was officially approved, and according to Coinglass data, as of now, the cumulative inflow of the Ethereum spot ETF has reached $2.68 billion, with a total net asset value exceeding $12.11 billion. However, it can be seen that Ethereum's attractiveness in the eyes of institutions is still far from comparable to Bitcoin.
The headline figure in May was undoubtedly CZ. After experiencing last year's exorbitant settlement, CZ faced a sentencing hearing this month. Back in April, to support this representative figure, the crypto community launched a large-scale campaign, delivering 161 letters of support led by his wife, He Yi, showcasing the rare trust and sincerity in the crypto circle. This effort ultimately succeeded, and compared to SBF's over a hundred-year sentence, four months was not too long. On September 28 of this year, CZ was released from prison, and BNB rose first in respect, reflecting his strong community influence.
In June, LayerZero and ZKsync airdrops sparked controversy.
In June, airdrops became the market's main theme. LayerZero's witch-hunting operation triggered widespread discussion, escalating the direct conflict between projects and the airdrop community. Even among airdroppers evolving towards professionalism, institutionalization, and scaling, they did not hold an advantage in the tug-of-war between project parties. On the other hand, while ZKsync faced controversies due to insider trading, its new standards for fund retention left a profound impact on subsequent airdrops. In the long run, the decreasing odds of airdrop profits, increasing complexity, and rising investment funds will shape the trend of airdrops. It must be acknowledged that the threshold for individual airdrop wealth will become increasingly high. Additionally, weakened macro expectations and miner capitulation directly led to the first major market shake-up of the year on June 18, with Bitcoin dropping below $65,000 and most altcoins falling over 20%.
In July, a sharp drop of 7.5, VC tokens mired in public opinion, and Trump's life photos were released.
After June 18, July 5 came in succession. Under the influence of the payment to the German government for buying coins, the crypto market faced another washout, with Bitcoin dropping below $60,000, returning to the levels seen at the end of February. From that time until mid-month, the term 'bull market' seemed to have disappeared from the crypto market, with complaints becoming a reality. VC tokens and exchanges were the first to suffer, and public opinion continued to ferment. However, on July 16, Trump's life photos were released, not only illuminating his election path but also bringing a glimmer of hope to the crypto market. Afterwards, Trump appeared at a Bitcoin conference, making ten promises including strategic reserves, a U.S. crypto center, and resignation of the SEC chair, successfully winning support from the crypto world.
In August, Telegram CEO Pavel Durov was arrested, making headlines.
In August, Telegram made headlines, and the TON ecosystem faced a severe setback. On the evening of August 24, French media reported that Telegram founder and CEO Pavel Durov was arrested at a French airport. On the day of the incident, Toncoin's 24-hour drop was nearly 11%, and TON TVL experienced a single-day drop of up to 57.62%. Given TON's independent ecosystem attributes, the price quickly recovered after the short-term impact. However, the Telegram incident prompted the market to reconsider decentralized social networking, seeking a balance between order and freedom under the banner of defending free speech, which is the next goal for the crypto market.
In September, the Federal Reserve cut interest rates for the first time in four years, initiating a rate cut cycle.
In September, the long-awaited interest rate cut in the crypto market finally came as expected. On September 18, the U.S. Federal Reserve announced a 50 basis point reduction in the federal funds rate target range, lowering it to between 4.75% and 5.00%. This was the Fed's first rate cut in four years, marking a transition from the most aggressive rate hike cycle in 40 years since 2022 to a rate cut cycle. As of now, the Fed has successfully implemented three consecutive rate cuts, bringing the federal funds rate target range down to 4.25%-4.50%, with a cumulative reduction of 100 basis points in this rate cut cycle. It must be acknowledged that macro easing has provided a solid foundation for the rise of the crypto market.
In October and November, the U.S. elections took center stage, with 'Bitcoin President' Trump entering the White House.
In October and November, the political sphere dominated the crypto headlines. On November 5, the world's spotlight was on the U.S. election, where Trump successfully secured more than half of the electoral votes, locking in victory in the presidential race and officially becoming the 47th President of the United States. The rise of the Bitcoin president sounded the horn for a bull market, and under the most pro-crypto Congress in history, crypto regulation welcomed a new era. Subsequently, Bitcoin soared, breaking through $90,000 in November, becoming the 8th largest asset globally, surpassing silver for the first time. On the other hand, Dogecoin surged as well, with Musk's government efficiency department beginning to take shape, heating up the PolitiFi market. Additionally, November was filled with hot topics, with DEXX being hacked, bringing shadows to the Chinese MEME circle, the DeSci track rising under the celebrity effects of CZ and Vitalik, Sun Yuchen's expensive bananas going viral in traditional media, and the emergence of the derivatives dark horse Hyperliquid's native token HYPE. Various events led to a FOMO in the crypto world.
In December, South Korea imposed martial law, Bitcoin broke through $100,000, and the SEC chair was replaced.
At the beginning of December, the South Korea martial law incident dominated the headlines, with Bitcoin briefly spiking 30%, and XRP dropping 60%, once again showcasing the influence of political situations on the crypto field. However, it is noteworthy that a large amount of funding flowed into Upbit, successfully allowing for some opportunistic gains.
On December 5, Bitcoin reached a historic milestone, officially breaking through the $10,000 barrier, embarking on the road to six figures. This not only legitimized digital gold but also formally recognized its value storage function worldwide, achieving a transformation from experiment to asset, and then to good asset, announcing a phased victory for the financial experiment initiated by Satoshi Nakamoto.
The premise for achieving this goal is favorable policies. As the inauguration approached, President Trump began to announce personnel arrangements and policy strategies one after another. Throughout December, the crypto market speculation revolved around Trump. Firstly, SEC Chairman Gary Gensler, who had long faced challenges in the crypto space, announced he would resign on the day of the president's inauguration. The new SEC chair, nominated by Trump, is Paul Atkins, who, after the formal nomination on December 5, had the crypto market pricing in this new chair with significant pro-crypto characteristics and rich experience, thus allowing Bitcoin to reach $100,000.
Good news keeps coming. On December 6, Trump nominated David O. Sacks as the White House cryptocurrency and artificial intelligence director, marking the first time the crypto sector has entered the White House, and being on par with the strategic AI industry, fully reflecting Trump's emphasis on the crypto field. Institutions responded quickly, with altcoin ETFs coming to the forefront, and the altcoin season quietly approaching, leading to a broad rise in the crypto market sector. The FOMO sentiment was briefly interrupted on December 11 when Microsoft shareholders voted against the Bitcoin investment proposal, compounded by the emergence of quantum chips raising industry concerns, causing Bitcoin to experience a significant drop, and the market gradually entering a sideways trend.
The last piece of good news before Christmas was that Microstrategy joined the NASDAQ 100 index. As the first crypto component stock included in the index, it reflects the growing influence of the crypto field, broadening investor channels and marking a watershed moment for crypto companies entering the traditional financial world.
Christmas arrived as expected, and the news front suddenly quieted. Funds conservatively flowed back, and the market trend remained in a downward spiral. However, it is evident that the crypto bull market has just begun. Trump has not yet officially taken office, and the macro environment continues to improve. The hidden dragon in the depths of 2024 is about to pass, and in 2025, the sight of the dragon in the fields may be the next step for the crypto market.
