Article author: Echo, MetaEra
It's time for the year-end summary again. The market in 2024 is complicated. The Bitcoin spot ETF was approved, the halving event came as expected, the price soared, the computing power reached a new high, the ecology emerged, the political situation changed, and the positive factors continued... Many factors have driven BTC to set off a global investment boom. The price of the currency has repeatedly set new highs, breaking through the 100,000 US dollar mark, and the Google trends index has more than doubled compared to last year, ushering in a highlight moment! For the entire crypto industry, 2024 is a milestone year. Each major event engraves the future trajectory of Bitcoin and even the entire cryptocurrency market.
This report is structured around time and pivotal events, as MetaEra will review the key moments that impact Bitcoin's fate. Let us delve into the 2024 Bitcoin chronicle and experience the glory and hardships of this year.
The moment for the crypto breakthrough: Bitcoin spot ETF approved.
On January 10, a milestone transformation arrived on the US financial stage—BTC ETF was approved. This allows US-listed companies, pension funds, and various institutional investors to officially enter this mysterious field through this financial instrument, opening a new era of publicly purchasing and holding Bitcoin.
In April, the Hong Kong subsidiaries of Huaxia, Bosera, and Harvest Fund 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 gloriously listed on the Hong Kong Stock Exchange.
The market cheered for the launch of ETFs, with the depth of crypto market products increasing significantly, as institutions rushed in, filled with joy. The previous doubts turned into a chase for value storage, with traditional capital flowing into the crypto world, making crypto investment increasingly closer to the Web 2.0 market.
Shortly after the news broke, the overall performance of the Bitcoin market remained stable, with no signs of fluctuation. Many questioned the ETF actions as weak, with conspiracy theories emerging about institutions, and voices criticizing 'showing off without doing real work' echoed. All this uncertainty attracted numerous investors and industry observers, becoming the most suspenseful chapter on Bitcoin's future development path. Amidst the turbulent currents, Bitcoin steadfastly adheres to the 'time machine theory', waiting for new momentum to prove its value.
Image source: SoSoValue
Bitcoin halving: A key turning point of fate.
On April 20, Bitcoin halved at block height 840,000, reducing the block reward from 6.25 Bitcoins to 3.125 Bitcoins.
Typically, after halving, the price of BTC tends to rise, as all three previous halvings have resulted in new highs. Many investors also hold the same expectations for the upcoming halving in April 2024, believing it will undoubtedly be a new driving force for the price after the ETF actions.
However, looking at the price months after the halving, Bitcoin's price did not immediately reach new historical highs after a brief pullback. Instead, after a series of actions including halving, conferences, political elections, regulatory changes, and industry strategic reserves, it began to take flight, significantly increasing. From the halving mechanism and past halving history, halving has a large impact, usually causing market volatility and increasing speculative activity in the crypto sector; reshaping the mining industry, leading to lower profit points for miners; and stimulating technological innovation and community development within the blockchain ecosystem. The halving event may also hedge against inflation and enhance Bitcoin's attractiveness as a long-term investment asset.
The above information indicates that although halving helps to reinforce the narrative of Bitcoin's scarcity, 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 every stage, and we cannot stop its footsteps. 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 the bull or bear markets will arrive, but focus on the long-term trends and fundamentals of the cryptocurrency market. Bitcoin always surprises you with its mythical gains in moments of questioning, calm, and anxiety. We just need to wait; Bitcoin remains great.
BTC ecosystem basic service providers: Miners, strong confidence vs. survival crisis?
From the miner's perspective, the Bitcoin mining landscape is changing dramatically in 2024. Due to halving, hash prices are riding an economic rollercoaster, and the development of inscriptions is quietly changing the primary source of miners' income, akin to an ecological awakening. In the past, mining relied solely on traditional block rewards, but as new phenomena emerged like mushrooms after rain, the focus of income has gradually shifted to infrastructure service Gas fees. For example, during Bitcoin's fourth halving, transaction fees surged dramatically, and Rune tokens paid high fees at the halving block, becoming an important component of miners' income. Statistics show that since January 1, 2024, in the overall miner fee income, standard financial transactions account for 67%, Runes 19%, and BRC-20 and Ordinals transactions combined account for 14%, with Gas fee income steadily increasing.
Against this backdrop, the role of miners is undergoing profound transformation. They are no longer simply block producers but more like infrastructure service providers for the Bitcoin ecosystem. Leveraging the network resources and infrastructure advantages accumulated through mining, miners can provide services for various transactions and earn Gas fees. This shift has deeply integrated miners into various aspects of the Bitcoin ecosystem, linking their fate closely with the entire ecosystem while seeking a more sustainable development path in the new economic model.
Bitcoin Conference: The rhythm of the market begins.
By mid-year, on July 27, the Bitcoin 2024 conference took place in Nashville, where notable politicians like Trump and Robert F. Kennedy took the stage. Their statements and initiatives regarding Bitcoin were like heavy bombs, creating waves at the conference and throughout the cryptocurrency industry.
Trump delivered a nearly hour-long speech. Although it started an hour late, tens of thousands of attendees were still enthusiastic. In his speech, Trump fully acknowledged Bitcoin's status as a scarce and safe-haven asset, affirming that Bitcoin will surpass gold to become the world's largest asset class. He stated that the United States must maintain its status as a superpower in cryptocurrency and emphasized that if elected, he would fire SEC Chairman Gary Gensler, who has long hindered the development of cryptocurrency in compliance matters, on his first day in office, and made 13 major commitments regarding cryptocurrency.
● On my 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 100% of its holdings.
● Bitcoin will fly to the moon.
● Do not sell your Bitcoin.
● Bitcoin may one day surpass gold's 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 cryptocurrencies 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 cryptocurrency capital 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 I take office, Joe Biden and Kamala Harris's anti-cryptocurrency movement will come to an end.
Whether it's due to his character or to amuse the crowd, he clearly improvised at the end: 'I wish everyone a good time, whether it's Bitcoin, cryptocurrencies, or others.' Taking advantage of the conference to heavily promote his political blueprint.
Like a star-studded political and financial feast. The market price performance during and after the Bitcoin conference sometimes leaps to new heights; at other times, it briefly adjusts to accumulate strength. The conference is like a huge vortex of crypto information, where various technological innovations, policy interpretations, and market trend information about Bitcoin converge and blend, then spread like ripples throughout the entire cryptocurrency field. The industry's discussion of politicians' statements and actions is also rife with speculation, awaiting the test of time.
Bull market outlook: Positive impact of US elections.
On November 6 at 14:27, the dust settled on the US presidential election, and Trump became the final winner. At 78 years old, he returned to the White House with the support of the crypto forces.
Trump's victory and subsequent series of favorable measures for the cryptocurrency industry have had a significant positive impact on Bitcoin's price. After the election results were confirmed, the Bitcoin market reacted quickly, with investors rushing into the market based on strong expectations for favorable future policies.
Upon taking office, he announced that he would implement various measures favorable to the crypto industry, including plans to repeal the SAB 121 Act after taking office on January 20 next year, clearing the way for traditional financial institutions to enter and promoting the institutional development of crypto assets, thus providing legal and compliant channels for a large amount of potential capital to flow into the Bitcoin market, expanding Bitcoin's market capacity and capital depth; following the commitments made during the Bitcoin conference, he plans to repeal the previous SEC chairman on his first day and appoint crypto-friendly Paul Atkins as the next SEC chairman, sending a strong signal of regulatory relaxation to the market, greatly boosting investor confidence; promoting the establishment of a strategic Bitcoin reserve to impact the market from the supply-demand perspective, retaining Bitcoin ownership and expanding expectations, reducing the selling pressure of Bitcoin in the market while increasing its attractiveness as a strategic asset; planning to stop government Bitcoin sales and using Bitcoin as an investment asset; his companies are also negotiating with the Intercontinental Exchange to discuss the acquisition of the cryptocurrency exchange Bakkt, injecting new vitality and imagination into Bitcoin's trading ecosystem and attracting more investors to participate, indirectly aiding in the price climb.
Bitcoin is riding the wave of US policy, sprinting on the upward trajectory of its price. Its future development space and potential appear increasingly vast under the intertwining of this series of positive factors. Welcome to the new era of cryptocurrency propelled by Trump!
A new political landscape: Core political figures are making statements, and government reserves are entering the fray.
Driven by a historic market surge, some countries are considering establishing national Bitcoin reserves. We are delighted to witness a significant trend: an increasing number of politicians are beginning to recognize its value.
US presidential candidate Trump stated that he would make the US the world's cryptocurrency capital, proposing not to sell the Bitcoin held by the US government but to retain it as a strategic reserve asset for long-term holding.
Russian President Putin has signed a law taxing digital currencies, classifying digital currencies as property applicable to foreign trade payments. Mining and sales are exempt from VAT, and mining infrastructure operators must report to tax authorities, while personal income tax is levied on actual income. Putin also emphasized at the forum that nobody can ban Bitcoin and other electronic payment methods, as they are new technologies that will continue to evolve.
Japanese Prime Minister Shibaki Shigeru: Restructuring the Web3 and crypto policy departments, the ruling Liberal Democratic Party will dissolve the current Web3 project group and establish a dedicated department within the party's Digital Society Promotion Department, led by the former secretary of the Web3 project group, though the new department's responsibilities have yet to be defined.
The South Korean State Council passed the enforcement order of the (Virtual Asset User Protection Law), effective from July 19, requiring virtual asset service providers to ensure user deposits through banks, and granting them the right to reasonably stop users from depositing and withdrawing cash and virtual assets.
Salvadoran President Nayib Bukele proposed renting the country's volcanoes to miners for sustainable Bitcoin mining, utilizing geothermal energy to lower mining costs. Previously, the country successfully mined Bitcoin worth about $46 million using geothermal energy.
Argentinian President Javier Milei advocates separating cryptocurrencies from state control, criticizing central bank digital currencies, promoting private management of cryptocurrencies, and warning against government overexpansion.
The Monetary Authority of Singapore announced support for the commercialization of asset tokenization plans, gathering 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.
Surinamese presidential candidate Maya Parbhoe has promised that if elected in 2025, Bitcoin will be established as legal tender, gradually replacing the Surinamese dollar, planning to dissolve the central bank, cut taxes, privatize public services, and use Bitcoin's transparency to combat corruption, stating that Bitcoin is key to rebuilding the national financial infrastructure.
Polish presidential candidate Sławomir Mentzen has promised to establish a Bitcoin strategic reserve if elected.
The various efforts and statements from these politicians indicate that Bitcoin is about to occupy a more significant position in the future financial landscape. It is steadily stepping into the grand vision of the global economic system, like a shining new star attracting the attention of the political world.
A shift in regulatory winds: Institutions are flocking in.
As the regulatory environment becomes more open and transparent in 2024, the crypto industry is entering a new era. Under this wave, the 'dual repair of currency and stocks' model is gradually becoming a favorite among listed companies, with many enterprises incorporating Bitcoin into their asset strategic reserves. Among them, Tesla and MicroStrategy are among the leaders, achieving 'diamond hands victory' with their firm holding strategies. MSTR's stock price surged from around $194 to nearly $500 in just about a month, an increase of around 150%; in the Hong Kong stock market, the 'Gemini' stocks Boya and Meitu, which are Bitcoin whales, hold 2,641 and 940 BTC, respectively; the first publicly listed cryptocurrency exchange Coinbase reported a total profit of $804 million from BTC, with a price-to-earnings ratio 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 and hold 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 buy 110 BTC at an average price of $90,932; a niche e-commerce platform focused on spirits and beverages, US-listed company LQR House Inc. (LQR) announced that 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) board approved the purchase of $1 million worth of Bitcoin as a reserve asset; on the same day, another US-listed company Hoth Therapeutics (HOTH) announced its board approved the purchase of up to $1 million worth of Bitcoin... It can be seen that many listed companies have fully recognized BTC's value storage function and price-boosting effect, eagerly joining this 'BTC strategic reserve race.'
Image source: HOD L1 5 Capital
BTC ecosystem: Dormant winter, quietly waiting for flowers to bloom.
The Bitcoin ecosystem resembles an accelerated version of the crypto world, from the birth of the Ordinals protocol at the end of 2022, to the small NFT boom at the beginning of 2023, and then to a brief bear market in the middle of 2023, where everyone was active in various spaces discussing the future. Subsequently, BRC-20 ignited a second small bull market. Entering the autumn of 2023, the market returned to silence, followed by a third climax in early 2024, and has since been brewing in seclusion. In just two years, it has completed the entire cycle of bull and bear markets spanning three to four decades in the crypto world.
In the past year, Bitcoin's market dominance has significantly increased from 45.27% to 56.81%. The trading volume of its spot ETFs has surged, and a new market centered on Bitcoin as a core asset, using ETFs and US stocks as channels for capital inflow, with US-listed companies as carriers, has fully opened. This highlights the necessity of developing its ecosystem and improving capital efficiency. In Layer 2, 77 projects have been active over the past three years. In the first half of 2024, driven by the ETF craze, some old projects saw trading volumes and token prices rise, with various solutions emerging, totaling a locked value of $3 billion, which is expected to grow significantly in the future. New execution standards have emerged in Layer 1 execution, with activity steadily increasing but the momentum not sustained. In other infrastructure, interoperability solutions like bridges and WBTC are mainstream, with more solutions expected to launch; regarding security layers, interoperability may threaten asset safety, and related security solutions like Babylon's Bitcoin timestamp and staking protocols have emerged, along with new technologies like Nubit that release 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 definitely not miss the raging bull market; there are still many narratives waiting to be explored. The previous dormancy and accumulation have already built up sufficient power. 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 around 10:30 a.m., the price of BTC briefly surged above $100,000, with a 24-hour increase of nearly 5%, marking Bitcoin's first breakthrough of the $100,000 barrier as expected. Meanwhile, Ethereum surpassed 3,800 USDT, with a 24-hour increase of 5.35%; SOL broke through 230 USDT, with a 24-hour decrease narrowing to 2%.
Image source: OKX
The media effect triggered by Bitcoin's price surpassing $100,000 has already allowed crypto and decentralization to successfully enter the mainstream public's view. It has prompted the public to look back at its past, from its insignificant beginnings to its current proud standing, with its price ascent resembling a grand legend. Counting from that iconic pizza day, it has already undergone sixteen years of baptism.
It is gradually moving from the margins to the center. When Bitcoin first broke the $1 mark, perhaps many did not expect it would have such astonishing potential in the future; and when it crossed important thresholds like $100 and $1000, the whole world took notice. Now breaking $100,000 has propelled Bitcoin to a whole new height.
Finally, I wish Bitcoin can continue to create miracles, and that we, who believe in Bitcoin, can create miracles.
