2024 was a monumental year for the cryptocurrency industry, marked by significant milestones and developments that shaped the future of digital assets. From Bitcoin’s historic surge to $100,000 to Ethereum’s game-changing Dencun upgrade, let’s delve into the key highlights of the year and their implications for the crypto space moving forward.
Bitcoin’s long-awaited rise to $100,000 was a defining moment in 2024. The journey to this milestone was fueled by a combination of factors, including the Bitcoin halving event in April, which historically triggers price surges, and the approval of spot Bitcoin ETFs. The market also witnessed a surge in prices following the U.S. election results in November, with Bitcoin crossing the $100,000 mark on December 5. While the prices have slightly cooled since then, trading between $94,000 and $96,000, the $100,000 milestone remains a significant achievement for the leading cryptocurrency.
In a major breakthrough for the industry, the SEC approved spot Bitcoin and Ethereum ETFs in January 2024. This marked a significant milestone, as spot Bitcoin ETFs had previously faced rejection due to concerns about market maturity and manipulation. The approval of these ETFs opened up new avenues for investors and further legitimized the cryptocurrency market. The subsequent approval of spot Ethereum ETFs in May further solidified the growing acceptance of digital assets in the traditional financial landscape.
2024 also brought about significant changes in crypto tax reporting, with the IRS introducing new rules for tracking the cost basis of cryptocurrencies. Under the new guidelines, individuals are required to track each wallet or exchange separately, akin to tracking stocks in separate brokerage accounts. To aid in this transition, the IRS introduced “safe harbor” rules to help taxpayers comply with the new regulations and avoid audits on past calculations. Platforms like Bitcoin.Tax have introduced tools to simplify the reallocation of crypto holdings and ensure compliance with the updated rules.
The regulatory landscape saw a tussle between the SEC and crypto firms in 2024, with enforcement actions totaling $4.7 billion, a substantial increase from the previous year. Key events included fines imposed on Ripple Labs for selling XRP tokens without proper registration and Coinbase’s legal battle with the SEC. The announcement of SEC Chair Gary Gensler’s resignation and the nomination of a pro-crypto SEC chair, Paul Atkins, signaled a potential shift in regulatory approach towards digital assets.
Ethereum’s Dencun upgrade in March 2024 was a significant development for the network, aimed at making transactions faster, cheaper, and more efficient. The upgrade introduced features such as Proto-Danksharding, which improved scalability and reduced transaction fees for users. With enhancements in staking security, memory processing, and smart contract security, the Dencun upgrade set a new standard for blockchain technology and paved the way for further innovation in the industry.
Despite the positive developments, 2024 also saw a rise in crypto scams, rug pulls, and hacks, underscoring the need for stronger security measures and stricter regulations. Centralized finance platforms were particularly vulnerable to hacks, with losses totaling billions of dollars. The incidents serve as a stark reminder for investors to exercise caution and conduct thorough research before engaging with crypto platforms.
As we look ahead to 2025, the cryptocurrency industry is poised for another dynamic year. The $100,000 milestone for Bitcoin and the advancements in Ethereum’s technology are expected to attract more participants to the market. The implementation of new IRS tax rules, the potential impact of a pro-crypto SEC chair, and the ongoing focus on security challenges will shape the regulatory landscape and market dynamics in the coming year. While the future of crypto remains unpredictable, 2024 laid a strong foundation for further growth and innovation in the industry.