Bitcoin Dominates in 2024, Setting the Stage for a New Chapter in Crypto's History

2024 is undoubtedly a pivotal year in the development of Bitcoin. The official launch of the U.S. Bitcoin spot ETF marks an important milestone in the integration of Bitcoin

2024 is undoubtedly a pivotal year in the development of Bitcoin. The official launch of the U.S. Bitcoin spot ETF marks an important milestone in the integration of Bitcoin with the traditional financial system since the birth of stablecoins a decade ago. This event not only signifies the rise of Bitcoin as a mature asset but also shifts the discussion of Bitcoin as a global reserve asset from a niche group of enthusiasts to the mainstream, opening a new chapter for it in the financial sector.

In 2024, Bitcoin first broke through the $100,000 mark. This was driven by a buying spree from publicly listed companies like Strategy, which reportedly accumulated 257,250 Bitcoins in 2024. Meanwhile, the newly approved U.S. spot Bitcoin ETF accumulated over 500,000 Bitcoins in 2024. Combined with the 619,000 Bitcoins previously held by Grayscale Bitcoin Trust, the total amount of Bitcoin held by ETF products has now exceeded 1 million.

Additionally, since Donald Trump spoke at the Bitcoin Nashville Conference in July, discussions about a national Bitcoin strategy have rapidly gained traction globally.

With policy support, Bitcoin continues to strengthen. Most analysts expect the current bull market to last until 2025, peaking in the third quarter. However, uncertainties remain in the global economy, and if a recession occurs, Bitcoin may already be nearing its cycle peak. Warning signs of such a recession could include a stronger dollar, declining bond yields, and worsening U.S. employment data.

Analysis

For years, Bitcoin has often been viewed as a relatively stagnant and unattractive asset, while emerging altcoins have appeared more vibrant in recent years. However, in 2024, Bitcoin has again come into the limelight in the industry, a shift that is primarily reflected in three widely discussed trends. First, the development of the Bitcoin ecosystem has reached a new peak. New sidechains have gone live, and Bitcoin staking technology has been implemented. Additionally, ZK-proof has been validated on the Bitcoin mainnet for the first time.

Second, with the launch and trading of the U.S. Bitcoin spot ETF and its related options, Bitcoin has attracted the attention of traditional capital markets, with its assets under management (AUM) now exceeding 1.1 million Bitcoins, approximately $10 billion. This fully integrates Bitcoin with the world’s most liquid capital pools.

Finally, as discussions about the U.S. strategic Bitcoin reserves heat up, the narrative of "Bitcoin supremacy" has entered the realm of mainstream politics. Bitcoin, as the foundational layer of a robust new monetary system, is gradually being taken more seriously.

Throughout its development cycle, Bitcoin's dominance has continued its long-term upward trend that began at the end of 2022. Besides the renewed interest from investors in Bitcoin, this trend is also widely attributed to the global tightening cycle that began in January 2022, which pushed U.S. policy rates to 5.5%.

As of the writing of this article, Bitcoin's upside potential seems to have reached its limit. Currently, stablecoins alone account for 17.5% of the total market capitalization of cryptocurrencies, while Bitcoin's market share is nearing 60%. However, if high inflation leads to sustained high interest rates or if the global economy experiences a hard landing, Bitcoin's dominance will remain elevated, and the long-awaited rotation of altcoins is unlikely to occur. Earlier in mid-December, the market had strong expectations for a comprehensive altcoin season, but as Bitcoin's market share rebounded from 55% to 58%, those expectations have gradually faded.

2. Altcoins: Full Explosion Still Requires Time

In 2024, the altcoin market faced numerous challenges. Bitcoin absorbed most of the institutional funds this year, while meme coins attracted the attention of retail investors. Nevertheless, after a seven-month period dominated by Bitcoin, the market briefly entered an altcoin season in early December. However, Bitcoin's market dominance only slightly declined after reaching a high of 61% in mid-November. This indicates that the market has not yet fully shifted to an altcoin-dominated scenario.

From the data, the total market capitalization of altcoins (excluding stablecoins) grew by 76% in 2024, breaking through the historical high of 2021. This growth was primarily driven by the strong performance of large-cap coins, with meme coins showing the highest gains among all altcoin categories. According to DeFiLlama, the weighted average return of 900 meme coins tracked exceeded 1600%, highlighting their outstanding performance in 2024. Although Bitcoin's dominance in the market has loosened, the overall market structure has not fundamentally changed, and a full explosion of altcoins