Author: Tuo Luo Finance
For the crypto industry, 2024 will be a tumultuous year. During this year, cryptocurrencies will enter the mainstream elevation path, with institutionalization, compliance, and politicization becoming the core narrative. Bitcoin's rise to $100,000 marks the end of the crypto market's stigmatization, with digital gold shining and a new cycle slowly unfolding.
However, crypto is far more than just Bitcoin, and the market is certainly not limited to institutions. The shifting spotlight recorded the changes of the year; Bitcoin danced gracefully on stage, but it was not always the main character. Each month of the year brought new topics and headlines to the crypto market, with technology, projects, communities, and individuals appearing one after another, threading through the tumultuous 2024 and writing bold footnotes for the arrival of 2025.
Looking back on the past 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 onto the Noah's Ark of the crypto world. On January 10, Eastern Time, the U.S. SEC announced that 11 spot Bitcoin ETFs were officially approved for listing, with the approved issuers including Grayscale, Bitwise, Hashdex, iShares, Valkyrie, Ark 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, and Franklin.
For the crypto market, the Bitcoin ETF is undoubtedly a historic achievement. After a decade-long battle with the SEC, the crypto world has finally received regulatory recognition, marking a new chapter for the digital asset market. Following this, Bitcoin was officially recognized as a legal and compliant investment product, with massive funds from traditional institutions entering this market, further promoting the compliant development of the crypto market.
As of December 31, according to Coinglass and SOSOvalue data, the total inflow of Bitcoin ETFs reached $35.27 billion, with total net assets exceeding $109.532 billion. However, as Bitcoin ETFs continue to grow, institutionalization has gradually replaced miners, who once dominated, becoming the controllers of Bitcoin prices. Perhaps this is how the times change.
In March, Ethereum's Cancun upgrade
After a relatively calm February, Bitcoin and Ethereum returned to the forefront in March. 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 had already considered $70,000 to be Bitcoin's peak, not anticipating that this was merely a silent milestone.
However, looking at Ethereum, despite a concentrated narrative, its price still performed mediocrely. But as the leader of the industry, development is the most focused theme for Ethereum. On March 13, Ethereum successfully completed the Cancun upgrade, successfully introducing the data unit Blob of Ethereum's scalability solution (protodanksharding), ushering in an era of fee reduction for Layer2.
As of now, all major Layer2s such as 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 transaction count of 2.4 million, utilizing 4.9 million blobs, which has saved 3,008 ETH in gas fees. However, it is worth noting that the liquidity of L2 networks is fragmented across multiple sub-networks, and L2's fee reduction has captured some of the value from the mainnet, making the competition between Ethereum and L2 increasingly evident.
In April, Bitcoin halved, and Hong Kong's virtual asset spot ETF was approved.
The most important event in April was Bitcoin's 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. The previous halving occurred on May 11, 2020. The impact of halving on price is undoubtedly long-term, and from the perspective of the affected groups, mining enterprises, as the main force in mining, were most widely impacted. Mining enterprises initiated a wave of consolidation, further intensifying the head effect, with top mining firms like Marathon, CleanSpark, and Riot striving to enhance capacity, utilizing both high computing power equipment and low energy costs, leading to intensified industry competition, with some mining enterprises already beginning to shift towards the hotter AI field.
Another big 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, primarily issued by Huaxia Fund (Hong Kong), Bosera International, and Harvest International. In reality, after the declaration in December 2022, Hong Kong's Web3 market cooled down, despite frequent policies; the market remained hesitant. The virtual asset ETF is a significant milestone for Hong Kong. Therefore, before its announcement, despite frequent bearish sentiment, there remained a relatively bright hope, with some even considering it a precursor to the mainland's opening up. But the reality was clearly a cold shower; not only were funding channels restricted, but due to compliance costs, the virtual asset spot ETF had higher fees compared to similar products in the U.S., leading to a significant gap in fundraising. According to SOSOVALU data, as of December 27, the total net assets of Hong Kong's Bitcoin spot ETF were only $409 million, holding approximately 4,290 Bitcoins. Moreover, June marked the one-year anniversary of the formal implementation of Hong Kong's new crypto regulations, and several native crypto exchanges faced failures, raising more questions in the market. It is evident that Hong Kong's Web3 still has a long way to go, but with the strong energy of traditional finance, there is still hope for Hong Kong to overtake and stabilize the path for stablecoins and RWAs in 2025.
In May, Ethereum's spot ETF rose from the dead, and CZ faced a critical hearing.
In May, attention returned to Ethereum. What was once thought to be hopeless, the Ethereum spot ETF, has risen from the dead to become the dark horse of the year. On May 24, according to official documents, the U.S. Securities and Exchange Commission (SEC) approved the plans for spot Ethereum ETFs from the NYSE, 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 critical processes reflects a greater shift in regulatory attitudes, not only shedding its historical baggage of being classified as a security but also symbolizing a turning point in the openness of U.S. regulation. Other decentralized projects may hope for regulatory relief, timely saving the crypto market from Bitcoin's siphoning effect. Looking at each bull market, Ethereum's upward overflow is the key indicator of sector rotation.
The headline figure of May is undoubtedly CZ. After last year's exorbitant settlement, CZ faced a sentencing hearing this month. As early as April, in support of this representative figure, the crypto community launched a large-scale rally, with 161 letters of support led by his wife He Yi delivered to the court, witnessing the rare trust and sincerity in the crypto space. This move ultimately achieved victory; compared to SBF's sentence of over a century, a four-month sentence is not too long. On September 28 this year, CZ was released from prison, and BNB rose as a sign of respect, reflecting its strong community influence.
June LayerZero and ZKsync airdrop controversy
In June, airdrops became the market's main theme. LayerZero's witch-hunting action sparked widespread discussion, intensifying the direct confrontation between projects and the 'farming' parties. Even the 'farming' parties, which are evolving towards specialization, institutionalization, and scaling, do not hold an advantage in the offensive and defensive dynamics with project parties. On the other hand, while ZKsync faced controversy due to insider trading, the new standard for capital retention it introduced also left a significant impact on subsequent airdrops. In the long term, the reduction in short positions, increased complexity, and rising investment funds will become trends in airdrops. It must be acknowledged that the threshold for individuals to become wealthy through airdrops will increasingly rise. Additionally, the weakening of macro expectations and the surrender of miners also directly led to this year's first major shock on June 18, with Bitcoin then dropping below $65,000 and most altcoins falling more than 20%.
In July, the 7.5 drop, VC tokens caught in public opinion, and Trump's life photo was released.
After June 18, 7.5 came to take over again. Under the influence of the repayment in Mentougou and the German government's purchase of coins, the crypto market once again welcomed a washout, with Bitcoin dropping below $60,000, returning to late February levels. Since then, until mid-month, the term bull market seemed to have disappeared from the crypto market, and complaints became a reality, with VC tokens and exchanges being the first to bear the brunt, and public opinion continued to ferment. But on July 16, Trump's life photo was released, illuminating not only his personal election path but also bringing hope to the crypto market. After this, Trump appeared at the Bitcoin conference, and his ten promises, including strategic reserves, establishing the US crypto center, and stepping down as SEC chairman, successfully won support from the crypto world.
In August, Telegram CEO Pavel Durov was arrested, making headlines
In August, Telegram hit the headlines, delivering a severe blow to the TON ecosystem. On the evening of August 24, a French television station disclosed that Telegram founder and CEO Pavel Durov was arrested at a French airport. On the day of the incident, Toncoin fell nearly 11% in 24 hours, and TON's TVL saw a single-day drop of up to 57.62%. Given TON's independent ecological attributes, prices quickly recovered after the short-term impact. However, the Telegram incident once again prompted the market to rethink decentralized social media, 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, starting a rate cut cycle
In September, the long-awaited interest rate cut for the crypto market finally arrived as scheduled. On September 18, local time, 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 also the first rate cut by the Federal Reserve in four years. This marked a formal shift for the U.S. from the tightest interest rate hike cycle in 40 years since 2022 to a rate cut cycle. To date, the Federal Reserve has successfully implemented three consecutive rate cuts, bringing the federal funds rate target range to 4.25%-4.50%, with a cumulative cut of 100 basis points in this round of rate cuts. It must be acknowledged that macroeconomic easing provides a solid foundation for the rise of the crypto market.
In October and November, the U.S. election was the main storyline, with 'Bitcoin President' Trump taking over the White House.
In October and November, the political arena became the headline in the crypto field. On November 5, all eyes were on the U.S. election, where Trump successfully garnered over half of the electoral votes, securing victory in the presidential election and officially becoming the 47th president of the United States. The ascent of the 'Bitcoin President' signified the horn of the bull market, and under the backdrop of the most crypto-friendly Congress in history, crypto regulation welcomed a new era. Subsequently, Bitcoin surged, breaking through $90,000 in November, surpassing silver for the first time to become the eighth-largest asset by market capitalization globally. On the other hand, Dogecoin also rode the wave, with Musk's government efficiency department being established, hyping PolitiFi. In addition, November was filled with hotspots, with DEXX being hacked, casting a shadow over the Chinese MEME circle, the DeSci track leaping under the celebrity effect of CZ and Vitalik, Sun Yuchen's expensive banana making headlines in traditional media, and the emergence of the derivatives dark horse Hyperliquid's native token HYPE being launched, all of which brought a wave of FOMO to the crypto world.
In December, South Korea's martial law, Bitcoin breaking $100,000, and a change in SEC chair.
At the beginning of December, the South Korea martial law incident dominated headlines, with Bitcoin briefly spiking 30%, and XRP falling 60%, demonstrating the impact of political situations on the crypto field. Notably, a large amount of funds flowed into Upbit, successfully making a profit; sometimes, a flash crash can also be the key to a small gain.
On December 5, Bitcoin welcomed a historical milestone, officially breaking the $10 mark, opening the path to six figures. This not only legitimized digital gold but also officially recognized its value storage function by the world, achieving a transition from experiment to asset, and then to a 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 approaches, President Trump has begun to announce personnel arrangements and policy strategies. Throughout December, speculation in the crypto market revolved around Trump. First, SEC Chairman Gary Gensler, who had long struggled with crypto, announced he would resign on inauguration day, with the new SEC chairman being Paul Atkins, nominated by Trump. Following his formal nomination on December 5, the crypto market began to price in this new chairman, who has significant pro-crypto characteristics and ample experience, allowing Bitcoin to rise to $100,000.
Good news kept coming; on December 6, Trump nominated David O. Sacks as the White House cryptocurrency and artificial intelligence director, marking the first crypto position in the White House, aligning it alongside the strategic AI industry, fully reflecting Trump's emphasis on the crypto field. Institutions soon took notice, and altcoin ETFs came onto the agenda, ushering in a season of altcoins, with the crypto market experiencing a broad rally. The FOMO sentiment was briefly interrupted on December 11, when Microsoft shareholders voted against the Bitcoin investment proposal, compounded by concerns over the emergence of quantum chips, leading to a significant decline in Bitcoin and a gradual shift towards sideways fluctuations in the market.
The last good news before Christmas is that Microstrategy landed on the Nasdaq 100 index. As the first crypto component stock included in the index, it reflects the continuous growth of influence in the crypto field, not only broadening investor channels but also marking a watershed for crypto companies entering the traditional financial world.
Christmas arrived as scheduled, and news also came to a halt, with funds conservatively flowing back, and the market remained in a downtrend. However, it is evident that the crypto bull market has just begun, with Trump yet to officially take office and the macro environment continuing to improve. The hidden dragon in the depths of 2024 is about to pass, and 2025 may be the next step for the crypto market.
