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Highlights
- Bitcoin soared past the US$100,000 milestone before experiencing a slight dip, closing December with a 2.85% gain.
- Key developments like the approval of Bitcoin and Ethereum ETFs marked 2024 as a significant year for crypto adoption.
- With growing stablecoin reserves, the stage is set for a potential crypto rally in early 2025.
The first half of December 2024 was indeed historic for the cryptoverse, as Bitcoin finally achieved the long-anticipated milestone of surpassing US$100,000. This marked a high point for the cryptocurrency, reaching a peak at just over US$108,000 on December 17 after the US election results boosted market sentiment. However, a subsequent dip saw Bitcoin fall to just below US$92,000, closing the month with a 2.85% gain overall.
Despite the late-month cool-off, 2024 was largely positive for Bitcoin and the broader cryptocurrency market, with a 97% gain for Bitcoin over the year. Bitcoin and Ethereum seeing the approval of Spot Bitcoin and Ethereum ETFs in the United States was a watershed moment that propelled the legitimacy and adoption of digital currencies, attracting substantial institutional investment interest.
The year also witnessed the resolution of significant industry turbulence. Sam Bankman-Fried, the founder of the ill-fated FTX exchange, was sentenced to 25 years in prison for masterminding a large-scale fraud, allowing the crypto sector to begin rehabilitating its image among investors. Additionally, the Bitcoin halving event in April was a closely watched milestone, reducing mining rewards and further enhancing Bitcoin's scarcity, setting the stage for potential future price increases.
The US political landscape introduced changes that could influence the crypto market profoundly. The election of a pro-crypto president has brought a new dynamic, with substantial implications for the industry. The inauguration of Donald Trump, notable for his intent to dismiss the previously crypto-adverse SEC Chairman Gary Gensler, could accelerate regulatory and market shifts favorable to digital currencies.
Looking forward, significant increases in stablecoin reserves across major exchanges like Binance signal upcoming market activity. With Binance's stablecoin reserves reaching new heights, a record US$31 billion globally and US$45 billion under consideration, there's potential for substantial buying power. Analysts predict that this could fuel a Bitcoin rally in January 2025, possibly driving the price toward US$120,000.
Additionally, FTX's upcoming claims distribution on January 3, amounting to US$16 billion in cash, is poised to inject considerable liquidity back into the crypto ecosystem, potentially contributing to a strong performance in the first quarter of the new year.
As Bitcoin continues to integrate further into the global financial system and gains wider acceptance, the coming period could offer significant growth opportunities, driven by new investment flows and increasingly favorable market conditions. The momentum built up in December and through 2024 appears set to carry through into 2025, with industry watchers anticipating broader adoption and market development catalysts on the horizon.
