Bitcoin and Digital Assets Poised for a Banner Year in 2024

Top 10 Crypto Moments of 2024: From BTC’s Road to $100,000 to MicroStrategy’s Massive Buying Spree

By CCN.com December 29, 2024

2024 has been a banner year for Bitcoin, cryptocurrencies, and digital assets.

With the launch of the spot BTC exchange-traded fund in January, the maturing market, and the smooth fourth halving, several multi-billion dollar liquidations and sell-offs couldn’t stop BTC’s success this year. The price of BTC in U.S. dollar terms is up nearly 140% year to date and has risen even more relative to other fiat currencies (some of which experienced significant depreciation in 2024).

The 2024 U.S. election also holds vast implications for cryptocurrencies. Never before have Bitcoin or digital assets received so much attention on the world stage — at least not in such a positive way.

President Trump expressed support for progressive regulation and open dialogue with the industry over the summer. He even made an appearance at the Bitcoin Nashville conference shortly after an attempt was made on his life. Much of the cryptocurrency community rallied around Republican candidate and eventual Democratic nominee Kamala Harris to start making some positive moves around crypto.

Ahead of the November 5 election, Bitcoin saw a “Trump trade” from market participants. A special election contract on Deribit attracted billions of dollars in volume and open interest ahead of the election, and traders betting on new all-time highs soon after the election saw a major bullish bias. They were right, and by November BTC volume had exceeded $75,000.

The overall Senate vote, as well as the final vote, was widely viewed as positive for cryptocurrencies. As a result, BTC led the post-election rally for crypto assets, topping $80,000 by Nov. 11.

As we showed above, the increasingly bullish sentiment continued throughout the rest of November and into December, with Bitcoin currently trading at an all-time high of over $107,000.

Bitcoin Fees Surge Before the Fourth Halving

The fourth Bitcoin halving took place on April 19 this year. On Saturday, Bitcoin’s average transaction fee soared to a record high of $146. This was significantly higher than Ethereum’s average fee of $3 that day.

The historic surge in Bitcoin network fees was perhaps its most significant development in the fourth quarter. Despite warning signs, it caught many market participants by surprise.

Ordinals founder Casey Rodamor announced plans to launch Runes, a protocol that makes it easier to issue fungible tokens on Bitcoin. However, while users may have expected a rise in transaction fees based on Ordinals’ impact on transaction fees, the historic increase still caught many by surprise.

Ordinals allow node operators to burn data and images onto newly created Bitcoin blocks. These so-called “registrations” are similar to NFTs, increasing demand for Bitcoin block space and boosting the fees earned by BTC miners.

The launch of Runes proceeded in a similar manner. The launch of the protocol led to an increase in demand for block space, which in turn impacted fees.

BlackRock Surpasses Grayscale

BTC ETFs have broken all kinds of records this year, with total assets under management of 11 funds rising to over $100 billion.

BlackRock is the big winner, showing that major institutions are interested in Bitcoin and digital assets. Its spot BTC ETF has over $55 billion in assets under management, surpassing Grayscale’s GBTC in a matter of months.

Launched in 2013 by digital asset manager Grayscale, GBTC is largely a crypto-first product, and its huge premium/discount to net asset value means that institutional buying is limited. As a result, it was quickly surpassed by BlackRock after the ETF was launched this year.

GBTC has been losing assets for much of this year after the firm decided to keep fees at 1.5%. In the U.S. ETF space, where firms are used to low fees, much of Wall Street prefers BlackRock and Fidelity to GBTC.

ETH/BTC Ratio Drops

The ETH/BTC ratio has continued to decline since the merger and shows no signs of slowing down in 2024. The ratio compares the performance of the two assets and falls when Ethereum underperforms Bitcoin.

Other factors contributing to the decline include the rise of Solana as users migrated to cheaper networks during a period of heightened speculation in March and the fourth quarter of this year. Meme tokens (which we’ll discuss later) were behind much of the speculation and drove Solana DEX volume to surpass Ethereum at times this year.

It fell to 0.033 in November, its lowest level since March 2021. What’s behind the poor performance?