Article source: Meta Era
Article author: Echo, MetaEra
Source: MetaEra
It's time for year-end summaries again. The market dynamics of 2024 are complex, with the approval of Bitcoin spot ETFs, the halving event arriving as scheduled, prices skyrocketing, hash rates hitting new highs, ecological rise, political turbulence, and continuous good news... Many factors are driving BTC to ignite a global investment frenzy, with prices repeatedly setting new highs, breaking the $100,000 barrier, and the Google Trends index surging more than double compared to last year, ushering in a moment of brilliance! For the entire cryptocurrency industry, 2024 is a milestone year. Every major event is etched with the trajectory of Bitcoin and even the entire cryptocurrency market's future.
This report uses time as a thread, with events as nodes. MetaEra will carefully review those key moments that influence Bitcoin's fate. Let's step into the 2024 Bitcoin chronicle together and experience the glory and hardships of this year.
The moment of crypto unlocking: Approval of Bitcoin spot ETFs.
On January 10, the US financial stage welcomed a milestone transformation - the approval of BTC ETFs. This has allowed US-listed companies, pensions, and various funds to enter this mysterious field openly through this financial instrument, marking the beginning of a new era of publicly purchasing and holding Bitcoin.
In April, the Hong Kong subsidiaries of Huaxia, Bosera, and Jiashi Funds applied for the first batch of Hong Kong Bitcoin and Ethereum spot ETF products, which were officially approved by the Hong Kong Securities and Futures Commission. Subsequently, on April 30, these highly anticipated products were officially listed on the Hong Kong Stock Exchange.
The market cheers the launch of ETFs, deepening products in the crypto market, with institutions entering en masse, filled with joy, and past doubts turning into a pursuit of value storage. Traditional capital flows into the crypto world, and crypto investment increasingly aligns with the Web 2.0 market.
In the short term after the news broke, the overall performance of the Bitcoin market remained stable, with no fluctuations. Many questioned the ETF actions' weakness, and conspiracy theories around institutions proliferated, with voices claiming 'doing flashy things, not real work' rising and falling. All this uncertainty is like a magnet, attracting countless investors and industry observers' attention, becoming the most suspenseful chapter in Bitcoin's future development path. Amidst the undercurrents, Bitcoin adheres to the 'time machine theory,' waiting for new momentum, using time to prove its value.
Image source: SoSoValue
Bitcoin Halving: A Crucial Turning Point in Destiny.
On April 20, Bitcoin underwent a halving at block height 840,000, reducing the block reward from 6.25 Bitcoins to 3.125 Bitcoins.
Typically, BTC's price tends to rise after a halving, as the previous three halvings have consistently set new highs. Many investors hold the same expectations for the upcoming halving in April 2024, believing it will undoubtedly be a new driving force for price increases following the ETF actions.
However, based on the price trends in the months following the halving, Bitcoin's price experienced a small retracement in the short term before not immediately reaching new historical highs. Rather, it expanded its wings and soared significantly after a series of actions, including the halving, the conference, political elections, regulatory changes, and industry strategic reserves. From the perspective of the halving mechanism and past halving history, the impact of halving is considerable, usually leading to market fluctuations and increasing speculative activity in the crypto space; reshaping the mining landscape, causing miners' profit points to decline; stimulating technological innovation and community development within the blockchain ecosystem. The halving event could also hedge against inflation, enhancing Bitcoin's attractiveness as a long-term investment asset.
The above information indicates that while halving helps strengthen Bitcoin's scarcity narrative, macroeconomic factors can also have a significant impact on Bitcoin's price. This mysterious force of Bitcoin cannot be accurately predicted based on history; it refreshes people's understanding at each stage, and we cannot stop its advance. As Binance CEO Richard Teng said, we need to look further ahead and view market performance from the perspective of market cycles. We should not be anxious about when bulls and bears will arrive but should focus on the long-term trends and fundamentals of the cryptocurrency market. Bitcoin always surprises you with its incredible rises during moments of doubt, calmness, and anxiety, taking it to the moon. We just need to wait; Bitcoin remains great.
BTC ecosystem basic service providers: Miners, strong confidence vs. survival crisis?
From the miners' perspective, the Bitcoin mining landscape in 2024 is changing dramatically. The halving and the drop in hash prices have created an economic roller coaster, not to mention that the development of inscriptions and runes in the first half of the year has quietly changed the main source of miners' income, akin to an ecological enlightenment. In the past, mining relied on single traditional block rewards for sustenance, but with these emerging phenomena sprouting up like mushrooms after rain, the main focus of income has gradually shifted to infrastructure service gas fees. For example, during Bitcoin's fourth halving, transaction fees surged, and Rune tokens paid high fees at halving blocks, becoming a significant component of miners' incomes. Statistics show that since January 1, 2024, standard financial transactions account for 67% of overall miner fee income, Runic transactions account for 19%, BRC-20 and Ordinals transactions together account for 14%, and gas fee income is increasing day by day.
Against this backdrop, the role of miners is undergoing profound changes. They are no longer just simple block producers but more like infrastructure service providers within the Bitcoin ecosystem. With the network resources and infrastructure advantages accumulated from mining, miners can provide services for various transactions and earn gas fees. This transition deeply integrates miners into all aspects of the Bitcoin ecosystem, linking their fate closely with the entire ecosystem while promoting ecological development, exploring a more sustainable development path under the new economic model.
Bitcoin Conference: The Origin of Market Dynamics
On July 27, the Bitcoin 2024 conference landed in Nashville, where prominent politicians like Trump and Robert F. Kennedy made appearances. Their statements and initiatives regarding Bitcoin were like powerful bombs, causing ripples throughout the conference and the entire cryptocurrency industry.
Trump delivered a nearly one-hour speech, though an hour later than scheduled, the tens of thousands of spectators on site were still enthusiastic. In his speech, Trump fully recognized BTC as a scarce and safe-haven asset, endorsed BTC's future potential to surpass gold as the world's largest asset class, and stated that America must maintain its superpower status in cryptocurrency. He also emphasized that if elected, he would fire the SEC chairman Gary Gensler, who has hindered the development of cryptocurrency through compliance measures, on his first day in office and made 13 major commitments regarding cryptocurrency.
● On the first day, I will fire Gary Gensler and appoint a new SEC chairman.
● If elected, I will establish a strategic national Bitcoin reserve for the US government.
● The US government will retain its 100% ownership.
● Bitcoin will fly to the moon.
● Do not sell your Bitcoin.
● Bitcoin may one day surpass gold in market value.
● I reiterate my commitment to reducing Ross Ulbricht's sentence.
● During my presidency, there will never be a CBDC if I am elected president.
● Bitcoin and cryptocurrency will soar in unprecedented ways.
● Bitcoin does not threaten the US dollar; it is the current US government that poses a threat to the dollar.
● The United States will become the global capital of cryptocurrency and the world's Bitcoin superpower.
● Bitcoin represents freedom, sovereignty, and independence from government coercion and control.
● I assure the Bitcoin community that on the day of my inauguration, the anti-cryptocurrency campaign by Joe Biden and Kamala Harris will come to an end.
Regardless of whether it is his personality or to amuse, he clearly improvised at the end: 'I hope everyone has fun, whether with Bitcoin, cryptocurrency, or anything else.' Riding the wind of the conference, he significantly rallied support for his political blueprint.
Like a dazzling political and financial gala. The market price performance during and after the Bitcoin conference occasionally leaped to new heights; at times, it briefly retreated to gather strength. The conference was like a massive vortex of crypto information, where various technical innovations, policy interpretations, and market trends regarding Bitcoin converged and then spread like ripples throughout the entire cryptocurrency field. Opinions within the industry regarding politicians' statements and actions are varied, eagerly awaiting the test of time.
Bull Market Outlook: Positive impacts from the US election.
On November 6 at 14:27, the US presidential election concluded, with Trump emerging as the final winner, returning to the White House at the age of 78 with the support of crypto power.
Trump's victory and his subsequent series of pro-crypto initiatives have had a very significant positive impact on Bitcoin's price. After the election results were confirmed, the Bitcoin market reacted first, as investors flocked to the market based on strong expectations of favorable future policies.
He announced that upon taking office, he will implement multiple measures favorable to the crypto industry, including expected repeal of the SAB 121 law on January 20 next year to clear obstacles for traditional financial institutions entering the market to promote the institutional development of crypto assets, providing a legitimate and compliant channel for substantial potential funds to flow into the Bitcoin market, expanding Bitcoin's market capacity and capital depth; continuing the promises made at the Bitcoin conference, he intends to dismiss the former SEC chairman on his first day in office and appoint crypto-friendly Paul Atkins as the next SEC chairman, sending strong signals of regulatory relaxation to the market, significantly boosting investor confidence; promoting the establishment of a strategic Bitcoin reserve to influence the market from the supply-demand perspective, retaining Bitcoin ownership and expanding scale expectations, reducing the selling pressure of Bitcoin in the market, while increasing its attractiveness as a strategic asset; planning to stop government Bitcoin sales, using Bitcoin as an investment asset; his companies are also in discussions with the Intercontinental Exchange regarding the acquisition of the cryptocurrency exchange Bakkt, injecting new vitality and imagination into Bitcoin's trading ecosystem and attracting more investors to participate, indirectly helping prices rise.
Bitcoin is riding the wave of American policy, charging ahead on the rising trajectory of prices, and its future development space and potential appear increasingly boundless amid this series of positive factors. Welcome to the new era of cryptocurrency propelled by Trump!
New political landscape: Core political figures express varied positions, government reserves enter the scene.
Driven by historic market surges, some countries are considering establishing national Bitcoin reserves. We are delighted to witness a significant trend: an increasing number of political figures are beginning to acknowledge its value.
US President-elect Trump stated that he would make America the world capital of cryptocurrency, proposing not to sell the Bitcoin held by the US government but to hold it as a strategic reserve asset in the long term.
Russian President Putin signed a law taxing digital currencies, defining digital currencies as property applicable to foreign trade payments, exempting mining and sales from value-added tax, requiring mining infrastructure operators to report to tax authorities, and taxing personal income based on actual physical income; Putin also emphasized at the forum that no one can prohibit Bitcoin and other electronic payment methods, as they are new technologies that will continue to evolve.
Japanese Prime Minister Shigeru Ishiba: Reorganizing Web3 and cryptocurrency policy departments, the ruling Liberal Democratic Party dissolved its existing Web3 project group, establishing a dedicated department within the party's Digital Society Promotion Department, led by the former secretary of the Web3 project group, although the new department's responsibilities remain unclear.
The South Korean State Council passed the execution order of the (Virtual Asset User Protection Act), effective July 19, requiring virtual asset service providers to secure user deposits through banks and having the right to stop users' cash and virtual asset deposits and withdrawals based on reasonable grounds.
Salvadoran President Nayib Bukele proposed renting the country's volcanoes to miners for sustainable Bitcoin mining, using geothermal energy to reduce mining costs. Previously, the country successfully mined Bitcoin worth about $46 million using geothermal energy.
Argentine President Javier Milei advocates for separating cryptocurrencies from state control, criticizing central bank digital currencies, promoting private management of cryptocurrencies, and warning against government overreach.
The Monetary Authority of Singapore announced support for the commercialization of asset tokenization plans, summoning financial institutions from multiple countries to conduct industry trials and encouraging the establishment of industry standards to promote the commercialization and promotion of tokenized capital market products.
Suriname presidential candidate Maya Parbhoe has pledged to make Bitcoin legal tender if elected in 2025, gradually replacing the Surinamese dollar, plans to abolish the central bank, cut taxes, privatize public services, and combat corruption using Bitcoin's transparency, claiming that Bitcoin is key to rebuilding the country's financial infrastructure.
Poland's presidential candidate Sławomir Mentzen has promised to establish a Bitcoin strategic reserve if elected.
The efforts and statements of these political figures indicate that Bitcoin is about to occupy a more pivotal position in the future financial landscape, steadily stepping into the grand vision of the global economic system, like a shining new star, attracting the attention of the political world.
Regulatory wind shift: Institutions are flooding in.
As the regulatory environment becomes more open and transparent in 2024, the crypto industry is entering a new era. Under such a wave, the 'dual repair of coins and stocks' model is gradually becoming a new favorite among listed companies, with many enterprises incorporating Bitcoin into their asset strategic reserves. Among them, Tesla and MicroStrategy stand out, reaping 'diamond hand victories' with their firm holding strategies, with MSTR's stock price soaring from about $194 to nearly $500 in just about a month, an increase of approximately 150%; the Hong Kong stock market's 'twin stars,' Boya and Meitu, both Bitcoin whales, hold 2,641 and 940 BTC, respectively; the first publicly traded crypto exchange, Coinbase, has a total profit of $804 million, with a stock price earnings multiple of about 7.88 times.
Such effectiveness has led to more listed companies following suit. On November 19, Nano Labs Ltd (Nasdaq: NA) announced plans to allocate part of its remaining cash flow to Bitcoin, holding it as a long-term strategic reserve asset; on the same day, US-listed company Genius Group Limited (GNS) announced it had spent $10 million to purchase 110 BTC at an average price of $90,932; the niche e-commerce platform in the spirits and beverage industry, US-listed LQR House Inc. (LQR), announced its board had approved the purchase of $1 million worth of Bitcoin as part of its capital management strategy; on November 20, US-listed biopharmaceutical company Acurx Pharmaceuticals (ACXP) approved the purchase of $1 million worth of Bitcoin as a reserve asset; on that day, another US-listed company, Hoth Therapeutics (HOTH), announced its board approved the purchase of up to $1 million worth of Bitcoin... It is evident that many listed companies have fully recognized BTC's value storage function and stock price boosting effect, joining this 'BTC strategic reserve race.'
Image source: HODL15Capital
BTC Ecosystem: Lying dormant in winter, waiting for flowers to bloom.
The Bitcoin ecosystem is like an accelerated version of the crypto circle, from the birth of the Ordinals protocol at the end of 2022, to the mini-boom of NFTs in early 2023, to the brief bear market in mid-2023, where everyone was active in various spaces discussing the future, followed by the BRC20 igniting the second mini-boom. Entering the fall of 2023, the market returned to silence, followed by the third climax in early 2024, and has remained dormant and brewing until now. In just two years, it has traversed the bull and bear cycles of the entire crypto circle over the past three to four decades.
Over the past year, Bitcoin's market dominance has significantly increased from 45.27% to 56.81%, with a substantial growth in the spot ETF holdings. The new market, centered around Bitcoin as the core asset, with ETFs and US stocks as channels for capital inflow, and US-listed companies as vehicles, has fully opened, highlighting the necessity of its developmental ecology and improving capital efficiency. In terms of Layer 2, 77 projects have made moves in the past three years. In the first half of 2024, driven by the ETF craze, trading volumes and token prices of some old projects have risen, with various solutions appearing, totaling a locked value of $3 billion, which is expected to grow significantly in the future. New execution standards have emerged in the Layer 1 execution layer, with activities previously growing steadily but failing to maintain momentum. Among other infrastructures, interoperability solutions like bridges and WBTC are mainstream, with more solutions expected to emerge. In terms of security layers, asset security may be threatened by interoperability, and relevant security solutions like Babylon's Bitcoin timestamp and staking protocols have appeared, along with new technologies like data availability layers (DA layers) such as Nubit, releasing Bitcoin's potential value.
The Bitcoin ecosystem is currently still in a relatively disharmonious position. However, compared to last year, there has been significant progress. The Bitcoin ecosystem will not miss out on a raging bull market; there are still many narratives within the Bitcoin ecosystem waiting to be discovered. The earlier dormancy and sedimentation have accumulated enough strength. A large number of innovative projects are on the way.
Witnessing history: Bitcoin breaks $100,000 for the first time; where to next?
On December 5 at around 10:30 AM, BTC's price once surged over $100,000, with a 24-hour increase of nearly 5%, marking Bitcoin's much-anticipated first breakthrough of the $100,000 barrier. At the same time, Ethereum surpassed 3,800 USDT, with a 24-hour increase of 5.35%; SOL surpassed 230 USDT, with a 24-hour decline narrowing to 2%.
Image source: OKX
The media effect triggered by Bitcoin's price breaking $100,000 has successfully brought Crypto and decentralization into the mainstream public's view. It has compelled the public to reflect on its past, from its insignificant beginnings at birth to its current proud stance, with its price ascent resembling a grand legend. If calculated from that iconic Pizza Day, it has undergone sixteen years of baptism.
It gradually moves from the margins to the center. When Bitcoin first broke the $1 mark, perhaps many did not anticipate its astonishing potential; when it crossed significant thresholds like $100 and $1,000, the whole world took notice. Now, surpassing $100,000, it has pushed Bitcoin to a whole new height.
Finally, I wish Bitcoin can continue to write miracles, and I hope those of us who believe in Bitcoin can create miracles.
