Dispatch #224: 2024: The year in review
Dec 24•6 min read
In this patch of your weekly Dispatch:
- Bitcoin’s gains in 2024
- Crypto adoption leaders
- The biggest trend in TradFi
The big idea
Bitcoin: Taking over 2024 by storm
With seven days left until 2025, it’s time for a trip down memory lane. Of all the developments in 2024, the adoption of Bitcoin by the world’s largest asset managers and the subsequent approval of Bitcoin Spot ETFs was hands down the most impactful one. The move was not only a symbol of Bitcoin’s penetration into mainstream finance but also transformed accessibility to Bitcoin and catapulted its popularity and price to new heights.
BlackRock’s IBIT was a landmark success: it became the world’s fastest-growing ETF, reaching $50 billion in record time and surpassing the holdings of gold ETFs, underscoring the seismic shift in investor sentiment.
Following the initial hype around Spot Bitcoin ETFs in late 2023, 2024 saw a sustained upward momentum. Bitcoin broke through resistance levels to establish new trading ranges, buoyed by ETF flows and macroeconomic tailwinds, more than doubling in price over the year. By the end of 2024, Bitcoin achieved a stunning 120% YoY return – see the chart below for the biggest profit-taking moments.
The 2024 halving
While the 2024 halving was somewhat overshadowed by the ETF phenomenon, it played a crucial role in reinforcing Bitcoin’s economic model. The halving was seamless, reducing Bitcoin’s block reward to 3.125 BTC and its designed inflation below 1%.
U.S. elections and Bitcoin advocacy
The U.S. presidential election added a new layer of excitement to Bitcoin’s narrative. With Bitcoin-friendly candidates shaping policy discussions, the election ignited unprecedented levels of anticipation for a crypto-welcoming regulatory framework. The groundwork laid in 2024 is expected to pave the way for significant regulatory clarity in 2025, bolstering confidence across the digital asset space.
Ethereum
Ethereum’s strong year
Ethereum had a standout 2024, fueled by the launch of U.S. spot ETH ETFs, which spiked institutional interest and drove ETH’s price to a nine-month high of $4,016. With over $11.5 billion in holdings, spot ETH ETFs have solidified Ethereum’s presence in traditional finance.
The Dencun upgrade enhanced scalability, slashing transaction costs by 99% and reinforcing Ethereum’s dominance in DeFi, which holds over $70 billion in total value locked. The NFT market, largely built on Ethereum, is also showing signs of recovery, further boosting ETH demand. Ethereum’s layer-2 networks have played a key role in its 2024 success. As of December, stablecoins worth $13.5 billion are locked on Ethereum’s layer-2 platforms, with Arbitrum leading the way, holding $6.73 billion.
Ethereum’s price momentum was bolstered by technical breakouts and BlackRock’s $250 million ETH purchase. As macro factors like the U.S. election and potential regulatory shifts unfold, Ethereum remains well-positioned for continued growth into 2025.
Solana
The best crypto of 2024?
Solana (SOL) emerged as one of 2024’s top-performing cryptocurrencies, surging 135% from $100 at the start of the year to over $250 by December. It had a lot to do with the growing network activity, institutional adoption, Bitcoin’s rally, and last but not least – memecoins.
Despite regulatory hurdles, such as the SEC rejecting Solana ETF applications from major firms, institutional interest in Solana remains strong. Q3 2024 saw $173 million in investments across 29 decentralized applications (DApps), marking a 54% quarter-over-quarter increase. This was further bolstered by players like Franklin Templeton launching an SEC-compliant money market fund on Solana and Societe Generale’s plans for a stablecoin. Additionally, a surge in meme coin activity pushed daily transaction fees to $4 million and increased active addresses to over 8 million. Solana’s Total Value Locked (TVL) reached a two-year high, further showcasing its growing influence in the crypto space.
TradFi trends
2024: The breakout for real-world asset tokenization
2024 marked a pivotal year for real-world asset (RWA) tokenization, set to reshape global finance. Stablecoins led the charge, with their market cap skyrocketing from $4 billion in 2020 to over $200 billion today, an extraordinary 4,900% growth. Beyond stablecoins, real estate tokenization gained momentum, unlocking new liquidity and access for retail investors. The tokenized real estate market is expected to reach $26 billion by 2034, drawing interest from traditional institutions.
Institutional adoption has surged, with major players like BlackRock and Goldman Sachs leading the way. BlackRock’s $600 million BUIDL fund has highlighted the potential of tokenized U.S. Treasuries, while Goldman Sachs has advanced RWA tokenization, focusing on institutional-grade assets such as securities and real estate. These efforts are driving RWAs toward becoming a core part of global finance in 2025 and beyond.
Adoption
2024: A crypto spring
Chainalysis experts have a way with reviewing crypto adoption and their 2024 Geography of Cryptocurrency Report is no exception. The study offers a comprehensive snapshot of regional crypto adoption trends, with India leading the charge, followed by Nigeria, Indonesia, and the U.S. North America remained the largest market, accounting for 22.5% of global crypto activity, driven by institutional investments and U.S. Spot Bitcoin ETFs, with $1.3 trillion in on-chain value received.
Central and Southern Asia, along with Oceania, experienced significant growth, while Singapore saw crypto payments surge to nearly $1 billion in Q2 2024. Latin America ranked fifth in global crypto activity, with Argentina and Brazil receiving $91.1 billion and $90.3 billion, respectively. Institutional investors played a crucial role, especially in Brazil, where institutional transactions surged by 48.4% in early 2024.
In China, the increasing use of OTC crypto reflects economic uncertainty, while Venezuela’s 110% growth underscores crypto’s role as a hedge against inflation. Global crypto adoption is expanding, fueled by both emerging markets and institutional interest.
Macroeconomic roundup
The soft landing in progress
2024 was marked by global efforts towards a soft landing for the economy, as the U.S. Federal Reserve led the battle in balancing monetary policy against inflation. Global economic growth is slowing, with a forecasted 3.2% expansion, driven by diverging regional outcomes.
The U.S. economy is decelerating but remains resilient, while the eurozone is recovering, buoyed by strong consumer spending. In contrast, China faces ongoing property sector challenges, putting its 2024 growth target at risk. Labor markets remain robust, and inflation is gradually moving toward central bank targets, paving the way for a global easing cycle. The U.S. Federal Reserve has already implemented three rate cuts in 2024, with other central banks, like the ECB and Bank of Canada, following suit.
The week’s most interesting data story
When banks fell in love with BTC
Spot Bitcoin ETFs reached over $129 billion in assets under management (AUM) by mid-December, surpassing gold ETFs for the first time. Launched in January after a lengthy SEC review, these funds, led by BlackRock’s iShares Bitcoin Trust (IBIT), have seen significant inflows, driven by institutional confidence in Bitcoin. The dynamics and size of these inflows and outflows have highlighted shifting investor sentiment, underscoring the growing influence of Bitcoin ETFs in the market.
The numbers
Top 5 stats of the year
$3.71 trillion - Crypto’s record market cap in 2024.
10,309 - Cryptocurrencies in circulation, reflecting a 25% growth this year.
195 - Stablecoins in circulation, enhancing liquidity across the market.
3,826 - Meme coins, contributing to a surge in market activity.
108.52 trillion - Bitcoin's mining difficulty, up 40% in 2024, setting a new record.
Hot topics
What the community is discussing
Getting ready with predictions?
Another perspective of 2024.
A 20-year headstart erased in 10 months.
Dispatch is a weekly publication by Nexo, designed to help you navigate and take action in the evolving world of digital assets. To share your Dispatch suggestions and comments, email us at [email protected].