Crypto’s comeback: Triumph over turmoil in 2024

As a seasoned crypto investor with a decade of experience under my belt, I must say that 2024 was quite the rollercoaster ride for our digital finance world. The industry’s resilience and adaptability never cease to amaze me. From grappling with regulatory crackdowns and government decisions to learning from failed projects and legal disputes, we’ve seen it all.

One thing that stood out was the fallout from Bitcoin Runes. Remember when everyone thought they were the next big thing? Well, now they barely take up 5% of transactions on the blockchain! I guess you could say they went from “Runes” to “run for the hills.”

But despite these setbacks, the progress made in 2024 sets the stage for a more sustainable and innovative future. As global adoption continues to grow and regulations become clearer, we are learning the importance of strategic decision-making, long-term vision, and a collective effort to build a more robust and inclusive financial ecosystem.

In closing, let’s remember that in crypto, as in life, you can’t always predict which way the market will go. Sometimes, it may be best to “HODL” onto your investments – or maybe just hold on for dear life!

2024 saw a significant revival in the cryptocurrency sector, driven by a strong surge in Bitcoin’s value, which propelled the market price of BTC beyond $100,000. This bull run not only rekindled investor trust but also generated impressive profits across the crypto market.

Among all the notable achievements throughout the year, it can be effortless to miss the substantial hurdles that both industry professionals and investors conquered.

Over time, the field of cryptocurrency has repeatedly shown its ability to bounce back from various obstacles, including fraudulent activities, collapses within the ecosystem, market downturns, legal battles, and geopolitical instability. This adaptability suggests that the industry will continue to grow and may experience further advancements and upheavals in the future.

Furthermore, specific actions taken by people and institutions left particularly harmful effects. In this analysis, we delve into some of the major hurdles that the collective crypto market managed to surmount during the year 2024.

Germany lost millions in untimely BTC sale

The approach known as ‘hodling’ – where investors keep and accumulate Bitcoins (BTC) over a long period – proved advantageous for BTC owners this year, with prices reaching more than $100,000 in December. Unfortunately, Germany, one of the larger Bitcoin holders, made a costly move by selling 50,000 BTC in July 2024.

As a researcher, I’d like to share an interesting financial event that took place recently: From June 19th to July 12th, the German government sold approximately 49,858 Bitcoins. The total revenue generated from these sales was around 2.6 billion euros, which is equivalent to about $2.8 billion in U.S. dollars. These Bitcoin were seized and subsequently sold in an “emergency sale” following a prediction that the value of Bitcoin could potentially drop more than 10%.

Regrettably, six months after Germany’s price analysts were assessing Bitcoin, it reached a record high, causing the value of 50,000 BTC to exceed $5 billion.

The decision to panic sell Bitcoin proved disastrous to the German government.

Despite other nations, Bhutan and El Salvador persisted in accumulating and maintaining their Bitcoin assets. Consequently, they amassed significant sums in potential profits.

Bitcoin ATM installations flatline

Installing more Bitcoin and cryptocurrency ATMs doesn’t necessarily mean more people are using crypto, but it does bring digital assets closer to users by making them more easily accessible.

Worldwide regulatory bodies are intensifying efforts to control Bitcoin Automated Teller Machines (ATMs), primarily to shield investors from fraudsters, conceal illegally obtained assets, or facilitate money laundering. Conversely, significant economies are advocating for the deployment of cryptocurrency ATMs to keep pace with technological advancements.

2024 saw a halt in the expansion of the global crypto ATM network, with the number of machines remaining relatively stable. Initially, there were approximately 36,500 crypto ATMs worldwide in January, which increased only slightly to about 38,600 by the end of the year.

While countries such as Australia have expanded their ATM networks significantly, adding approximately 1,400 machines by 2024, the overall number of ATMs globally has held steady since 2022, averaging around 38,000 units worldwide.

Next year, it’s anticipated that stricter rules and easier acquisition of operating permits for cryptocurrency Automated Teller Machines (ATMs) will enhance the overall crypto ATM market, leading to an increase in providers offering easy access to cryptocurrencies at a grassroots level.

The journey from Bitcoin Runes to ruins

On April 2nd, the Bitcoin Runes protocol was introduced as an upgraded, more efficient alternative to Bitcoin Ordinals, with the aim of enhancing the system for creating and managing non-interchangeable tokens (NFTs).

Bitcoin Runes gained favorable acceptance among Bitcoin users at the outset. In fact, during the first couple of months, Runes transactions accounted for a significant portion of the Bitcoin network’s traffic, often occupying around 60% of its total bandwidth.

The growing excitement about Bitcoin Runes led to a surge in demand for the Bitcoin network, providing temporary support for miners to keep their earnings stable during a period when rewards were decreased due to the latest halving event.

Nevertheless, as we approached July, there was a substantial drop in the daily transaction count associated with Bitcoin Rune. By December, these Rune transactions accounted for approximately 5% of all transactions taking place on the Bitcoin blockchain.

Instead, it’s now common to see renewed enthusiasm for Ordinals among investors, with this category claiming the greatest share of usage on the blockchain, surpassing even the original Bitcoin token.

Regulations force closure of crypto services

Due to the increasing popularity of cryptocurrencies among the general public, regulators around the world have come to understand that issuing operational licenses is essential to safeguard citizens from fraud and potential risks. Consequently, long-standing crypto exchanges have been compelled to halt their activities in multiple regions.

China

Chinese officials are persistently enforcing their prohibition on cryptocurrency from 2022, aiming to reduce outflow of money from their traditional economy. Yet, Chinese miners remain influential in the global crypto mining sector.

As a seasoned cryptocurrency enthusiast who has been closely following the industry for years, I find it fascinating to observe how the mining landscape of Bitcoin continues to evolve. Despite China’s active ban on crypto trading, it appears that over half of the Bitcoin mining network remains under the control of Chinese mining pools, according to CryptoQuant data. This is an interesting development given my personal experience in the industry, where I have witnessed numerous changes and adaptations by miners in response to regulatory challenges. It seems that these miners, who have invested significantly in equipment and infrastructure, are finding creative ways to navigate the complex regulatory environment in China while still maintaining control over a substantial portion of the network’s mining power. This situation underscores the resilience and adaptability of the Bitcoin mining ecosystem, as well as the challenges posed by ever-changing regulations in various jurisdictions.

As a researcher, I’ve observed that Hong Kong enforces a stringent licensing system, mandating all cryptocurrency trading platforms to submit their applications for operational licenses by May 2024. Interestingly, the Hong Kong Securities and Futures Commission (SFC) has shown flexibility in this matter, considering and accepting license applications even after the stipulated deadline.

India

17 cryptocurrency platforms based in India, such as Binance, WazirX, and CoinDCX, have been identified for not paying or collecting Goods and Services Tax (GST). This adds up to a staggering $97 million in unpaid GST taxes owed to the Indian government. The Indian government has raised concerns over this tax collection process carried out by these crypto exchanges.

Litigation against Binance executives

This year, key figures at Binance, including its founder and ex-CEO Changpeng “CZ” Zhao and their compliance officer Tigran Gambaryan, have found themselves embroiled in legal disputes with regulatory bodies.

In simpler terms, Cz confessed to breaking the Bank Secrecy Act (BSA) and neglecting to establish a robust system against Money Laundering (AML) at Binance, which resulted in a four-month jail sentence.

To begin with, Gambaryan faced accusations of tax evasion and money laundering in Nigeria. However, unlike CZ, Gambaryan was released from initial detention once the Nigerian government dismissed all charges against him at the Federal High Court situated in the capital city of Abuja.

It’s worth noting that Binance successfully preserved investors’ confidence in their platform and continued to hold the number one spot among crypto exchanges for having the highest daily trading volume, a position they have maintained for some time.

Conclusion

The incidents we’ve talked about earlier demonstrate the various obstacles that the cryptocurrency world successfully navigated. Dealing with these legal and practical difficulties underscores the industry’s robustness and ability to adjust when faced with tough situations.

In terms of overcoming regulatory obstacles, negative government actions, and recovering from unsuccessful ventures and legal conflicts, the world of cryptocurrencies has shown a remarkable capacity for adaptability and learning from past errors.

With increasing worldwide acceptance and clearer guidelines being established, the events of 2024 serve as a reminder of the significance of thoughtful planning, future-oriented perspective, and collaborative action in creating a stronger, more equitable financial infrastructure that benefits all.

Overcoming these obstacles, we’re now well-positioned to move towards a future that is both greener and more inventive within our industry.

2024-12-29 17:06