As the new year approaches, Foresight News will review 2024 and look ahead to 2025 in a series of must-read year-end articles in the last week of 2024. Seeing the past to know the future, observing the past to know the future.
Author: 1912212.eth, Foresight News
2024 is about to pass, and this year has undoubtedly left many memorable moments. In the crypto industry full of uncertainties, there have been surprises, hopeful aspirations, and amazing transformations.
At the beginning of this year, the long-awaited Bitcoin spot ETF was officially approved, and just as the public thought the Ethereum spot ETF was progressing slowly, the SEC's attitude suddenly changed. Subsequently, as the US election approached, the prediction market Polymarket became widely cited in reports due to the changes in its data, becoming one of the few crypto applications to go viral this year. Zhao Changpeng, the founder and CEO of Binance, was also sentenced to 3 months in prison after being found guilty, and was officially released from prison at the end of September.
In the fourth quarter, the crypto-friendly Trump was elected the next US president, and at Musk's suggestion, a Department of Government Efficiency (DOGE) was also established, which caused the long-dormant Dogecoin to surge. The Dogecoin craze has also led to the explosive growth of many meme coins. Solana has become the king of meme chains, with the total market value of meme coins on it once exceeding $15 billion. At the same time, the current SEC chairman, who has been criticized by the industry, will also step down when Trump officially takes office, which has brought a sigh of relief to the crypto industry. Bitcoin has also been constantly fluctuating upwards, finally breaking through the $100,000 mark on December 5th.
I. Bitcoin and Ethereum Spot ETFs Approved - Wall Street's New Darling
The long-awaited Bitcoin spot ETF has been eagerly anticipated by the industry since the end of 2023. On January 10th, the US Securities and Exchange Commission (SEC) announced that it had officially approved the first-ever ETFs (Exchange Traded Funds) with Bitcoin as a partial underlying asset, and allowed these ETFs to be publicly traded on the US market starting on January 11th, 2024 (Beijing time January 11th, 2024 early morning).
The issuers of the approved Bitcoin spot ETFs include 11 institutions such as Grayscale, Bitwise, Hashdex, iShares, Valkyrie, Ark 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity and Franklin. This decision marks a historic step in the US digital asset ecosystem and heralds a new historical starting point for the digital asset market.
As of December 9th, the total net inflow of Bitcoin has risen to $33.43 billion, and the data still shows no signs of slowing down.
The continuous setting of new historical highs is a microcosm of Bitcoin becoming a mainstream asset. The purchasing power of institutional and retail investors has also been released due to its spot ETF, laying the groundwork for the rise in Bitcoin prices.
After the approval of the Bitcoin spot ETF, market investors naturally shifted their attention to Ethereum. However, due to the lack of news, some people did not have high hopes for it. On May 14th, Bloomberg's senior ETF analyst Eric Balchunas said he did not expect the ETF to be approved before the end of 2025. At the same time, the bettors on the on-chain prediction market Polymarket believed that the probability of the SEC approving the ETF before May 31st was 14%.
But the approval of the Ethereum spot ETF came faster than expected. Just 10 days later, on May 24th, the Ethereum spot ETF was officially approved by the US SEC. The SEC approved the plans of the New York Stock Exchange, the Chicago Board Options Exchange (Cboe) and Nasdaq to list Ethereum spot ETFs, including 8 Ethereum spot ETF applications from institutions such as BlackRock and Fidelity.
Unlike the Bitcoin spot ETF, the launch of the Ethereum spot ETF coincided with a sluggish market, with data performance being poor, and even net outflows exceeding net inflows for a long time. It wasn't until early November that its net inflows significantly exceeded net outflows, and market funds began to pour in frantically.
As of December 9th, the total cumulative net inflow of Ethereum spot ETFs has reached $1.41 billion.
II. Polymarket Goes Viral - The Most Accurate Poll Platform
Relying on the hot market conditions and the heat of the US election, Polymarket successfully became the hottest viral crypto application by accurately predicting the outcome of events. In June this year, its trading volume reached a record high of $109 million, and its monthly active users reached a record high of 29,200.
In the months of July, August, September, and October leading up to the US presidential election, Polymarket's monthly trading volume even set new records. The debates over whether Biden would withdraw and the comparison of Trump and Harris's winning probabilities have pushed the platform's data to a climax. Figures like Musk and CNN have also frequently cited its data when discussing the election.
In October, Trump's probability of winning exceeded 60%, and by November 6th, his probability of winning had soared to over 88%. After the election results were officially announced, the accuracy of its data predictions was praised by market participants, "real money bets often better reflect the market's views".
Prediction markets are more accurate than opinion polls, the media, and expert predictions. In addition to the winner Trump, a French "whale" who bet on Trump's victory on Polymarket made a profit of $47.8 million. This "whale" is a French billionaire who has worked as a trader at multiple banks, and this summer he began to use his mathematical expertise to analyze US opinion polls, ultimately making a name for himself with this bet.
In November, Polymarket's trading volume reached a record high of $2.577 billion, and its active user count reached a record high of 293,705, with 339,531 new accounts added, also a record high.
III. CZ Sentenced to Four Months in Prison - 161 Support Letters Changed the Verdict
Binance founder CZ was officially released from prison on September 29th, 2024. Since the end of 2023, CZ has not been allowed to hold any position, and on November 22nd, he appeared in a Seattle court. On the same day, Reuters cited informed sources as saying that Binance's fine was $4.368 billion, setting a record for the highest fine paid in the crypto industry. Court records show that Binance faced three criminal charges, including conducting unlicensed money transfer business, conspiracy charges, and violations of the International Emergency Economic Powers Act.
As the founder of Binance, CZ was also unable to escape legal sanctions. CZ pleaded guilty to money laundering charges and paid a $50 million fine. He was then allowed to be released on $175 million bail and was even allowed to return to the UAE during the bail period. But as the case developed, the US court repeatedly overturned its previous decisions and banned him from traveling abroad.
In April 2024, the US prosecutor formally brought criminal charges against CZ, suggesting a 36-month prison sentence. The prosecutor pointed out that CZ's Binance platform had serious compliance issues, failed to report suspicious transactions related to terrorist organizations, and supported the sale of child abuse materials and the receipt of ransomware payments. The prosecutor believed that these actions seriously violated US anti-money laundering laws and must be severely punished.
On May 1st, CZ's criminal trial verdict was determined, and the 161 letters of support clearly played a major role in the verdict, as he was ultimately sentenced to 4 months in prison.
After his release from prison, CZ said in an interview that he has invested at least half of his time in the digital education platform Giggle Academy, and believes this project is very interesting and impactful.
IV. Trump's Victory - The First "Crypto" President
Photos of Trump raising his fist after being attacked during the campaign went viral globally. Perhaps it was a near-death experience that brought good fortune, as on Beijing time November 6th, Trump officially defeated Harris to win the US presidential election. Prior to the election, Trump presented himself as crypto-friendly, making a series of statements such as firing the current SEC chairman and establishing a national Bitcoin reserve.
After his successful campaign, Trump has been taking continuous actions, nominating 5 crypto players as cabinet members for the new government. Additionally, he plans to expand the CFTC's regulatory power and clarify the division of responsibilities with the SEC. The selection of the new SEC chairman is still being finalized.
The US regulatory policy has long been criticized by the market for its severity. The CFTC and SEC have taken enforcement actions in recent years, which have also dampened market confidence. CZ's formal inauguration and the nomination of the new cabinet members have raised market expectations.
BTC has been on an upward trend since Trump's election, breaking the $100,000 mark for the first time in early December. The new cabinet picks and the expectation of relaxed regulation have also fueled a DeFi revival, with various US-based public chains, DeFi, and RWA projects also seeing an uptick.
Bitwise CEO Hunter Horsley stated in early December that "in the past 30 days, Coinbase's market cap has increased by about $30 billion, and XRP's market cap has increased by about $100 billion. The US's shift from regulatory resistance to regulatory tailwinds is one of the biggest and most important structural catalysts seen in the crypto space, and its impact is just beginning."
V. The Department of Government Efficiency (DOGE) Established - The Victory of Dogecoin
Musk's Department of Government Efficiency plan was already in the works before Trump's election. This initiative, co-launched with former President Donald Trump, aims to conduct a comprehensive financial audit of the federal government and propose ways to reduce waste, fraud, and unnecessary spending.
In September, Trump formally stated in a speech at the New York Economic Club that if elected president, he would co-create the Department of Government Efficiency with Musk. Therefore, the recent document announcement is the formal unveiling of a long-gestating plan.
Trump has high expectations for it, stating: "It may become the 'Manhattan Project' of our time." Republican politicians have long dreamed of the "DOGE" goal. To drive this radical change, the Department of Government Efficiency will provide advice and guidance from outside the government, working with the White House and the Office of Management and Budget to drive large-scale structural reforms and create an unprecedented entrepreneurial government.
The final statement also says, "Their work will be completed no later than July 4, 2026, bringing a smaller, more efficient, less bureaucratic government, which will be the perfect gift to America on the 250th anniversary of the Declaration of Independence."
The English abbreviation for the Department of Government Efficiency is D.O.G.E., which is no coincidence. It is inspired by the Dogecoin community, and in a Twitter interaction in August, Musk described the name as "perfect."
Dogecoin has also risen nearly 6-fold to around $0.48 since the Department of Government Efficiency hype in September.
VI. HBO Documentary "Money Electric: The Bitcoin Mystery" Released - Who is Satoshi Nakamoto?
HBO's "Money Electric: The Bitcoin Mystery" documentary was released on October 8th. The film reveals the true identity of Satoshi Nakamoto. Prior to this, the potential candidates for Satoshi Nakamoto included Len Sassaman, Nick Szabo, and Adam Back.
The documentary identifies Bitcoin developer Peter Todd as Satoshi Nakamoto. Todd stated: "Falsely publicly identifying an ordinary person as exceptionally wealthy exposes them to threats of robbery and kidnapping. This problem is not only foolish but dangerous. Satoshi Nakamoto obviously does not want to be found, and there are good reasons for that, so everyone should refrain from helping those trying to identify Satoshi Nakamoto."
Although the documentary's identification of Satoshi Nakamoto has been denied by Todd himself, it has still sparked significant discussion.
On December 16th, after BTC broke above $106,000, Satoshi Nakamoto became the 16th wealthiest person, with a personal fortune exceeding $100 billion.
VII. SEC Chairman Gary Gensler Resigns - Dawn is Approaching
On November 22nd, according to a statement released by the US Securities and Exchange Commission, SEC Chairman Gary Gensler, whose term was originally scheduled to end in June 2026, will step down early on January 20, 2025.
Since the FTX incident, the SEC has further tightened its regulation of the crypto industry and initiated a series of high-profile lawsuits. Gary Gensler believes that most cryptocurrencies are securities and wants to use a series of enforcement actions to compel compliance.
He has repeatedly stated in public that the crypto industry is rife with fraud, scams, bankruptcies, and money laundering. On the other hand, during his tenure, Bitcoin and Ethereum spot ETFs were successively approved.
The industry has generally been critical of Gary, and with Trump's inauguration, the market has also been closely watching the SEC chairman appointment. In early December, Trump nominated Paul Atkins as the new SEC chairman, but the latter was unwilling to accept the position. Although Coinbase's CEO commented that Paul would be an excellent choice for the SEC, the position remains undecided.
VIII. Bitcoin Breaks $100,000 for the First Time - A New Historic High
On December 5th, after consolidating above $90,000, Bitcoin finally broke through the $100,000 mark. This is the first time Bitcoin has surpassed $100,000 since its inception in 2009, with its total market cap exceeding $2 trillion, making it one of the top 7 assets globally. Bitcoin has stood firm through numerous past bull and bear cycles, maintaining its position as the top cryptocurrency by market cap.
As the crypto asset continues to spread globally driven by the blockchain wave, and more financial institutions, sovereign states, and regions recognize its value, Bitcoin's price and market capitalization have been steadily expanding. Galaxy Digital CEO Mike Novogratz commented on Bitcoin's price breakthrough of $100,000, stating that a global Bitcoin buying frenzy is underway, as it is one of the first globally recognized assets.
With record-breaking net inflows into Bitcoin spot ETFs and the crypto-friendly Trump administration taking office, Bitcoin may continue to lead the crypto market's upward trend.
IX. MicroStrategy Selected for the Nasdaq-100 Index - The Crypto Version of Nvidia
On December 14th, Nasdaq (Nasdaq: NDAQ) announced the results of the annual reconstitution of the Nasdaq-100 Index® (Nasdaq: NDX®), which will take effect before market open on Monday, December 23, 2024. MicroStrategy Incorporated (Nasdaq stock ticker: MSTR) will be included in the Nasdaq-100 Index.
The Nasdaq-100 Index is an index launched by the Nasdaq Stock Exchange, comprising the 100 largest non-financial companies listed on the Nasdaq. The index reflects the overall market performance of these companies and is one of the key indices followed by global investors. In addition to the above requirements, to be selected for the Nasdaq-100 Index, companies must also meet certain criteria for market capitalization, stock liquidity, reputation, and financial profitability.
Since 2020, MicroStrategy has been using BTC as its primary reserve asset. As MicroStrategy has been aggressively buying BTC, the company's stock price has soared in the new cycle driven by the strength of Bitcoin. In January 2023, MSTR's stock price was only $150, but by March 2024 it had surged to a high of $1,999.99, with a market capitalization of tens of billions of dollars, a return of over 1000% in just over a year.
As of December 8 this year, data shows that MicroStrategy holds a total of 423,650 BTC (2.017% of the total BTC supply), with a total purchase cost of approximately $25.6 billion and an average purchase price of approximately $60,324.
For the crypto industry, the influence of the Nasdaq 100 may also inspire more companies to emulate CZ and join the ranks of BTC investors. As more and more institutional investors enter the crypto currency market, the market demand for BTC may further increase, driving up the price of BTC.
X. Stablecoin Market Cap Hits New High - Mass Adoption
On December 9, the total market cap of stablecoins exceeded $200 billion, setting a new record high. After reaching a peak of around $186 billion in May 2022, the stablecoin market cap has been declining, but since the beginning of 2024, the stablecoin market cap has been steadily rising, with capital continuously flowing into the crypto market.
For the crypto industry alone, stablecoins represented by USDT, USDC, and USDE have provided the fuel for the rise in market prices. Currently, USDT accounts for nearly 70% of the market, with a market cap of over $140.57 billion, while USDC has a market cap of over $42.11 billion. The emerging stablecoin USDE has a market cap of over $5.87 billion in just a few months.
Stablecoins provide lower fees, more payment service provider competition, and broader accessibility. By reducing transaction costs to almost zero, they can help businesses overcome the frictions of existing payment methods. The adoption of stablecoins will start from those businesses that are most affected by the current payment methods, and this process will disrupt the entire payment industry. Currently, industry giants such as Visa, Mastercard, and PayPal have all entered the stablecoin payment track.
