The year 2024 has been a period of significant challenge and opportunity for the cryptocurrency market. Bitcoin reached new all-time highs following the launch of ETFs, while Ethereum and other major digital assets experienced notable developments and volatility.
The introduction of spot Bitcoin ETFs in the United States propelled the world's largest cryptocurrency to record prices. The U.S. presidential election continues to influence the market, with former President Donald Trump embracing digital assets and President Joe Biden's stance remaining less defined. This article provides a concise recap of the major milestones from the first half of 2024 and explores the potential trajectory for the crypto market through the remainder of the year.
It has been an extraordinary period for digital assets. Bitcoin’s price performance has significantly outpaced the S&P 500, rising over 46% in the first six months compared to the index’s 15% gain. A key driver was the SEC's landmark approval of the first spot Bitcoin exchange-traded funds (ETFs), which dramatically increased institutional access to cryptocurrency investing. Concurrently, Bitcoin underwent its fourth halving event, a pre-programmed supply reduction that occurs approximately every four years.
However, the start of the second half was rattled by news from Mt. Gox. The defunct bitcoin exchange announced it would begin distributions of over $9 billion in Bitcoin and Bitcoin Cash to creditors in early July. These payments, which started recently, triggered a wave of selling pressure that briefly pushed Bitcoin’s price below $55,000.
Despite this short-term market shock, many market makers and investors remain optimistic about Bitcoin's long-term prospects. The following is a timeline of key events and an analysis of what may lie ahead.
Major Market Developments of 2024
The first half of the year was defined by institutional adoption, regulatory progress, and renewed retail interest, setting a complex stage for the months to come.
The Landmark Launch of Spot Bitcoin ETFs
The U.S. Securities and Exchange Commission (SEC) approved the first batch of spot Bitcoin ETFs on January 10th, with trading commencing the following day. The 11 approved funds have seen massive inflows, with cumulative net inflows reaching $14.64 billion and total trading volume surpassing $310 billion since their launch.
This institutional demand, coupled with favorable regulatory developments, fueled Bitcoin's rally to a new all-time high of $73,794 on March 14th. Following this peak, the market entered a period of heightened volatility, with Bitcoin's price fluctuating between approximately $60,400 and $71,700 for subsequent months. Key factors influencing this volatility included:
- Continued ETF Flows: The varying daily inflows and outflows from the new ETFs created consistent buying and selling pressure.
- The Runes Protocol: Launched in April, this decentralized protocol enables the creation of fungible tokens directly on the Bitcoin blockchain. It enhanced Bitcoin's functionality, scalability, and security, driving a surge in network demand and transaction fees.
- The Bitcoin Halving: The anticipated supply cut occurred on April 19th. Historically, halvings have preceded major bull runs, though analysts note that significant price appreciation has typically begun 8-9 months after the event, suggesting a delayed reaction could be in store.
Ethereum's Parallel Progress
Ethereum also had a standout first half, driven by two major events. The Dencun upgrade went live in March, significantly reducing transaction costs for Ethereum Layer 2 scaling solutions. This was followed on May 23rd by the SEC's surprise approval of listing applications for eight spot Ethereum ETFs. Trading for these funds is expected to begin in the coming weeks, potentially opening a new wave of institutional investment for the second-largest cryptocurrency.
Expansion of the Stablecoin Ecosystem
Amidst market volatility, demand for stable assets remained strong. The stablecoin market continued its expansion, with Circle's USDC market capitalization breaking above $60 billion. Tether (USDT) further solidified its position as the dominant stablecoin, with its market cap growing to a circulating supply of over $80 billion.
Surge in Trading Volumes
Rising crypto prices led to a significant spike in trading activity across major platforms. While Binance retained its position as the industry leader, U.S.-based exchanges reported tremendous growth.
- Coinbase reported record trading volumes in Q1, generating $1.6 billion in revenue—more than double the $736 million from the same period in 2023. Transaction revenue from both institutional and retail clients grew to $1.08 billion.
- Robinhood saw its crypto trading volume surge 224% year-over-year to $36 billion, far outpacing the 40% growth in its equity trading volume. Transaction-based revenue rose 59% to $329 million, which the company attributed primarily to crypto, which brought in $126 million—a 232% annual increase.
The Memecoin Phenomenon Continues
The speculative frenzy around memecoins remained a defining characteristic of the 2024 retail market. Platforms like Pump.fun gained notoriety by making it exceptionally easy to launch new tokens, leading to the creation of nearly 500,000 tokens in May alone.
Politically-themed memecoins like TRUMP and BODEN sometimes outperformed the broader market, acting as proxy bets on the upcoming presidential election. The cultural impact was further cemented when the original image that inspired the Dogwifhat (WIF) memecoin sold as an NFT for $4.3 million.
The trend expanded as celebrities launched their own tokens, drawing criticism from figures like Ethereum co-founder Vitalik Buterin. Whether these assets represent a gateway for broader adoption or simply speculative mania remains a topic of intense debate. For a deeper look at emerging crypto trends and market analysis, you can explore more strategies here.
Analyst Predictions for the Second Half of 2024
Looking ahead, analysts are focusing on several key themes that could dictate market direction through the end of the year.
Bitcoin's Path to $100,000?
Geoffrey Kendrick, Head of FX and Digital Assets Research at Standard Chartered, has made a notable prediction that Bitcoin could reach $100,000 by the time of the U.S. presidential election in November. Kendrick suggests Bitcoin may break its current all-time high in August before climbing to the six-figure price target.
This forecast is contingent on the political landscape. The analyst posits that a victory for Donald Trump would be viewed as favorable for Bitcoin due to expectations of a more supportive regulatory environment for cryptocurrency and mining operations. Kendrick points to a positive correlation between Trump's election odds and Bitcoin's price.
Supporting this bullish outlook, data from CF Benchmarks shows higher implied volatility for Bitcoin options expiring after August 30th. "This suggests traders are still seeking long-term Bitcoin price upside," analysts at CF Benchmarks noted.
Ethereum's Volatility and ETF Anticipation
A divergence exists between the implied volatility for Ethereum and Bitcoin. This reflects heightened market excitement around the imminent launch of U.S. spot Ethereum ETF trading. The expectation for these funds to begin operations has led investors to price in greater potential price swings for ETH compared to BTC in the coming months.
Frequently Asked Questions
What was the most significant event for crypto in the first half of 2024?
The approval and successful launch of spot Bitcoin ETFs in the United States was arguably the most significant event. It marked a monumental shift by providing a regulated and accessible pathway for institutional investors to gain exposure to Bitcoin, legitimizing the asset class and driving substantial capital inflows.
How does the Bitcoin halving affect the price?
The halving reduces the rate at which new Bitcoin is created by cutting the block reward for miners in half. This decrease in new supply, assuming demand remains constant or increases, has historically created upward pressure on price. However, the major price rallies have typically occurred several months after the halving event.
What are the risks associated with Mt. Gox distributions?
The risk stems from potential selling pressure. Creditors receiving large distributions of Bitcoin (BTC) and Bitcoin Cash (BCH) after a decade may choose to sell their assets, which could temporarily increase the supply on the market and drive prices down. This is seen as a short-term overhang on the market.
Why is the approval of Ethereum ETFs important?
Ethereum ETF approval is significant for many of the same reasons as Bitcoin ETFs. It provides a traditional, regulated investment vehicle for institutions and retail investors to gain exposure to ETH without directly holding the asset, potentially driving substantial new demand and further validating the Ethereum network.
What is driving the popularity of memecoins?
Memecoins are primarily driven by social media trends, community speculation, and the potential for high returns (along with high risk). They are often seen as cultural phenomena or gambling instruments rather than investments based on fundamental utility, though some argue they serve as an on-ramp for new crypto users.
How does U.S. politics influence cryptocurrency prices?
U.S. politics influences crypto through potential regulatory changes. Candidates and parties seen as favoring lighter-touch regulation or embracing digital asset innovation are generally viewed as bullish for the market. Conversely, those advocating for stricter regulations can create uncertainty and negatively impact prices. The upcoming election is being closely watched for this reason.