The cryptocurrency industry in 2024 was marked by groundbreaking milestones, significant market shifts, and growing institutional engagement.
From bitcoin’s yearly rally of over 150% to the approval of US spot bitcoin exchange-traded funds (ETFs), this year redefined the landscape of digital assets.
Bitcoin (BTC-USD) began 2024 trading around the $20,000 (£15,600) mark, but experienced an unparalleled surge in the latter half of the year, culminating in a new all-time high of over $106,000 (£83,500) in December.
Key to this rally was the approval of US spot bitcoin ETFs by multinational investment management companies like BlackRock (BLK), Fidelity, and ARK Invest in January. BlackRock’s iShares Bitcoin Trust (IBIT) alone has now amassed over $50bn in assets, according to BiTBO data, underscoring the rising demand for institutional-grade crypto investment products.
The ETFs debuted on 11 January, fuelling an initial surge to $73,000 by March. However, the market faced a summer lull, with bitcoin dipping to $55,000.
Momentum resumed after Donald Trump won the US presidential election on 5 November. The promise of pro-crypto policies under the incoming administration sparked renewed investor interest, driving bitcoin past the $100,000 (£78,000) mark by early December.
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Geoff Kendrick, global head of digital assets research at Standard Chartered Bank (STAN.L), noted that institutions purchased over 683,000 bitcoins in 2024, including significant inflows following Trump’s victory.
“Institutional adoption has propelled bitcoin to new heights, with the post-election period acting as a major catalyst,” Kendrick recently stated in a client note.
The launch of spot bitcoin ETFs highlighted the accelerating acceptance of digital assets within traditional finance. These funds attracted billions in inflows, signalling a paradigm shift as the bitcoin evolved from a speculative asset to a legitimate investment class.
Even US Federal Reserve Chair Jerome Powell acknowledged bitcoin’s growing stature, comparing it to gold during a December press conference.
On 4 December, Powell addressed bitcoin’s role in the financial ecosystem, describing it as a competitor to gold rather than the US dollar. Speaking at The New York Times DealBook Summit, Powell explained: “People use bitcoin as a speculative asset. It’s just like gold — only it’s virtual, it’s digital. It’s not a competitor for the dollar, it’s really a competitor for gold.”
His remarks highlight bitcoin’s growing status as a store of value rather than a functional currency, underscoring its divergence from traditional monetary systems.
Read more: Bitcoin price surges past $100,000 to hit record high
However, not all institutions have embraced cryptocurrencies. Critics argue that lingering regulatory uncertainties and volatility still deter broader participation. Nevertheless, 2024 established a solid foundation for deeper institutional involvement.
While bitcoin captured the spotlight, the altcoin market delivered a mixed performance. Ethereum (ETH-USD) solidified its position as the backbone of decentralised finance (DeFi), with total value locked (TVL) on the ethereum network reaching $80bn in December – a two-year high. Innovations in yield farming, liquid staking, and DeFi protocols drove this growth.
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Ethereum’s 2024 rally was underpinned by several key factors. Institutional involvement surged, with record-breaking futures contracts signalling heightened interest from major derivatives market players. The recovering non-fungible token (NFT) market also further boosted demand for ethereum, as renewed activity invigorated the ecosystem.
Meanwhile, speculative tokens like Shiba Inu (SHIB-USD) and Dogecoin (DOGE-USD) experienced dramatic price swings, fuelled by grassroots campaigns and celebrity endorsements. Critics, however, continued to highlight the absence of intrinsic value in these highly volatile ‘memecoin’ assets.
Regulation remained a double-edged sword in 2024. In the US, the approval of spot bitcoin ETFs marked progress, but the sector still grappled with a lack of clear frameworks for decentralised finance platforms.
However, president-elect Trump’s pro-crypto stance – including the appointment of Paul Atkins, a crypto-friendly Securities Exchange Commission (SEC) chair – is expected to foster a more favourable regulatory environment in 2025.
Read more: 10 crypto tokens that are rising alongside bitcoin
Globally, Europe’s Markets in Crypto-Assets (MiCA) regulation set high standards for consumer protection and market integrity. In Asia, Hong Kong emerged as a hub for blockchain innovation, attracting investment and talent.
Advances in quantum computing presented potential threats to blockchain security in 2024, with experts warning that current cryptographic algorithms could eventually be compromised. To address this, Ethereum, Cardano (ADA-GBP), and other projects accelerated research into quantum-resistant algorithms.
In December 2024, Google unveiled its Willow quantum computing chip. According to the company, the new chip can solve a problem in just five minutes – a task that would take the world’s fastest supercomputers an astonishing 10 septillion years to complete.
This chip represents the latest advancement in quantum computing, a cutting-edge field that leverages the principles of particle physics to develop an entirely new class of extraordinarily powerful computers.
Watch: IBM scientist on how quantum computers will impact global finance, AI and data | Future Focus
Additionally, on the innovation front, decentralised physical infrastructure networks gained traction, integrating blockchain technology with real-world assets. These networks promise applications ranging from decentralised wireless networks to smart grids, further expanding blockchain’s utility.
As 2024 comes to an end, the cryptocurrency sector stands at a crossroads. Institutional adoption has elevated digital assets to unprecedented heights, yet challenges – from regulatory uncertainty to technological vulnerabilities – persist.
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