Bitcoin Surpasses $100,000, Crypto Market in 2024 Positive

Global Economy & Politics 2024: Positive Signals for Crypto

Impact of major economic powers: the US and China

In 2024, geopolitical tensions and political instability continue to strongly affect the global economy. The United States and China, the world's two largest economies, play a key role in shaping the overall picture.

An overview of the financial picture for 2024 shows that risk assets are performing well, with Chinese stocks leading the market, achieving 29.6% growth. This reflects the recovery of some strategic industries in China, although internal challenges remain.

In the US, stocks continued strong gains, with the S&P 500 registering a 27 per cent gain, thanks to expectations of long-term gains from artificial intelligence (AI) and supportive monetary policies. Infrastructure sectors also stood out with 18% growth, reflecting large US investments in domestic manufacturing, particularly in semiconductors through the CHIPS Act.

In addition, technological competition between the United States and China also shapes the world economy. The United States imposed export controls on semiconductors, AI and high-tech to reduce dependence on China, while boosting domestic production.

China responded by boosting self-sufficiency, which is expected to spend more than $100 billion on the chip industry over the next three years. However, the deep dependence on global supply chains leaves both countries facing risks of economic disruption, especially as energy prices continue to rise due to the effects of conflicts in the Middle East and Eastern Europe.

Artificial intelligence (AI) technology has become a strategic field, applied not only to the economy but also to defense, with both the United States and China focusing on developing the technology to increase their position in the new world order.

Asset performance across the globe in 2024 shows a big difference. Stock markets and strategic sectors rose sharply. Other assets such as goods or government debt recorded great volatility. It all reflects a restructuring global economic landscape.

Geopolitical conflict: the global “fire pans”

Prolonged conflicts in the Middle East, Eastern Europe and tensions on the Korean Peninsula have caused disruption to energy and food supply chains, pushing oil prices up to around $92 per barrel, according to data from the U.S. Energy Agency (EIA). It is expected that this number will continue to rise in 2025.

In mid-2024, the humanitarian crisis in Gaza and conflict between Israel and resistance forces further destabilized the Middle East. Meanwhile, Eastern Europe continues to be a hot spot with Russia-Ukraine hostilities entering its third year, prolonging tensions with the West.

This instability caused capital flows to withdraw from risky markets such as stocks and cryptocurrencies, diverting to safe-haven assets such as gold. As a result, gold had a booming year, recording an ROI of 27%, as central banks boosted reserves to ensure the national balance of power.

Fed's monetary easing move

After two years of monetary tightening to control inflation, major central banks such as the US Federal Reserve (FED) and the European Central Bank (ECB) have shifted towards monetary policy easing in 2024.

At the end of the year, the Fed made two rounds of rate cuts: 50 basis points in September and 25 basis points in November, bringing the rate from 5.25 percent to 4.50 percent. Overall, the Fed's move was in response to signs of a potential slowdown in the U.S. economy, including slowing growth and a weakening labor market.

This policy has created an environment of cheap capital, stimulating the flow of money into risky assets such as stocks and cryptocurrencies. Meanwhile, the ECB kept interest rates steady but strengthened credit programs to support liquidity. These moves not only help stabilize global financial markets, but also promote the recovery of key economic sectors.

BTC outperforms growth — cash flow from traditional financial institutions

2024 saw an important turning point for the crypto market as the legalization and acceptance of Bitcoin reached a global scale.

Bitcoin Dominance (BTC Dominance) increased to more than 60% (as of December 1, 2024) — the highest level since April 2021. The Bitcoin Halving event in April 2024 played a key role in supporting this rally, but much of the attention came from major asset managers such as BlackRock, Fidelity and Franklin Templeton, when they launched Bitcoin spot ETFs in the US on January 11, 2024.

BlackRock's iShares Bitcoin Trust, launched in January 2024, quickly became the world's largest Bitcoin fund. Within 30 days, the fund reached $3 billion in assets under management (AUM) -- a record unprecedented even in traditional markets. Then, in just 200 days, the fund's AUM increased to $40 billion. These achievements have confirmed Bitcoin's position as a reliable and highly liquid asset.

According to a report from CoinShares, as of December 1, 2024, these ETFs attracted a net inflow of $30.4 billion and had an AUM of $104.4 billion, or about 1.1 million BTC (5.5% of the total current BTC supply).

According to data from the 13-F report (which requires reporting from asset managers valued over $100 million), institutional investors accounted for about 25% of the total shares of spot Bitcoin ETFs as of September 30, 2024. The shares were distributed almost evenly among investment advisers, hedge funds and other investors, with 1,349 separate institutions participating.

This reflects a significant shift from traditional assets such as gold or bonds to digital assets, as investors seek portfolio diversification and value preservation amid a volatile economy.

President Donald Trump, with his pledge to build a “National Bitcoin Repository” and remove restrictive policies from the SEC, has delivered another major boost to the market. After his re-election, he announced crypto-friendly policies that drove Bitcoin's price past the $100,000 mark and attracted large capital inflows from institutional investors.

According to Chainalysis, after his re-election, capital inflows from institutional investors into Bitcoin ETFs increased by more than 20% in the final month of the year, fueling the market's strong growth momentum. Trump's pro-crypto statements and the legalization via Bitcoin and Ethereum ETFs have strengthened investor confidence in the future of crypto in a favorable policy environment.

In addition, derivatives such as CME Futures became the new center of the market, along with the acceptance of Bitcoin from countries such as El Salvador further solidified the asset's position in global financial markets.

It can be said that the involvement of large traditional financial funds also opens up opportunities for the Real World Asset (RWA) piece to thrive.

The value of crypto assets has increased by more than 60%, from $8.4 billion at the end of 2023 to $13.5 billion as of Dec. 1, 2024, according to data from rwa.xyz. Financial institutions have leveraged blockchain technology to encrypt traditional assets such as government securities, enabling 24/7 transactions and fast cross-border payments.

The presence of large funds not only provides greater liquidity, but also promotes the use of crypto assets as collateral in derivatives transactions, optimizing margin management activities and minimizing risks. Tokenization has expanded from government bonds and money market funds to many other areas such as private credit, commodities, corporate bonds, real estate, and insurance.

Bitcoin grows 140% but altcoins “stomp”

General Market Performance

The performance of asset classes in 2024 shows that Bitcoin is once again outperforming traditional asset classes:

• The S&P 500 and Nasdaq rose strongly, supported by expectations of potential gains from AI-driven productivity, although valuations are getting pretty hot.
• Bitcoin (BTC): ROI reaches 140%.
• Ethereum (ETH): ROI reaches 61%.
• Total crypto market capitalization: Increased from $1,700 billion to $3,900 billion, achieving an ROI of 129.41%.

According to statistical data from K33, out of 100 projects with top growth:

• Only 25 projects surpassed Bitcoin's performance in 2024.
• 51 projects, despite performing lower than Bitcoin, still recorded positive growth for the year. Typical such as ETH and SOL.
• Eighteen projects recorded negative returns in 2024, with Layer-2 and Ethereum ecosystem projects among the worst performing coins.

While Bitcoin and several major altcoins like SOL, BNB, TRX, and TON hit new ATH levels in 2024, many other altcoins have yet to recover to their old highs:

• ETH, DOGE, ADA, AVAX, SHIB, LINK, and DOT have not peaked again since 2021. Some even trade at levels more than 50% lower than the previous ATH.
• “Dino coins” such as XRP and XLM, despite their recent recovery, are still unable to reach their old peak from 2018 and continue to lag behind.

Overall, 2024 is a year when Bitcoin asserts its leading position, while the majority of altcoins struggle to regain their growth momentum from previous cycles.

Stablecoin Growth Breakthrough

In 2024, the stablecoin recorded a spectacular breakout with a 48 percent increase in total market capitalization, reaching $193 billion in early December. Analysts predict the market could expand by as much as $3 trillion over the next five years, accounting for 14 percent of America's total M2 money supply, underscoring the increasingly important role of stablecoins in global finance.

The trading volume of stablecoins reached $27.1 trillion at the end of November, nearly three times as much as in the same period in 2023, including peer-to-peer (P2P) transactions and cross-border payments (B2B).

The highlight of the year was Stripe's acquisition of Bridge for $1.1 billion, the largest transaction in the crypto industry to date, in an effort to boost its stablecoin infrastructure. Stablecoins like USDC are growing in popularity due to regulatory compliance and easy integration with major platforms such as Visa and Stripe.

The Resurgence of DeFi

2024 marks DeFi's strong transition, escaping the unsustainable yield crisis of 2022 to become a more transparent and practical financial ecosystem.

This change is supported by a favorable regulatory framework in the US, which facilitates the clear regulation of stablecoins and paves the way for capital flows from traditional financial institutions. As a result, decentralized exchanges (DEXs) have significantly increased their market share, accounting for 14% of trading volume compared to 8% in 2023.

DeFi's growth is evidenced by the success of large protocols such as Aave, with record revenues of $31 million in Q4 2024, reinforcing confidence in the sustainability and profitability of this ecosystem.

Along with this, Donald Trump's “World Liberty Financial” project, built on the Aave platform, has highlighted DeFi's core role in financial innovation. Moreover, the “fee switch” story — the revenue sharing model with token holders — has contributed to driving AAVE token value, demonstrating DeFi's maturity as it moves from a speculative game to providing stable and sustainable financial services.

In addition, the combination of centralized and decentralized finance (CeDeFi) has opened a new chapter with the emergence of projects such as Ethena. With the USdE synthetic stablecoin, Ethena reached a capitalization of $6 billion in just one year thanks to an attractive 22% yield, and the expansion of the USdE supply boosted the value of the ENA token.

The strategic partnership between Ethena Labs and “World Liberty Financial” further strengthens DeFi's position in the favorable regulatory landscape, marking a major step from regulatory risk concerns to the stage of sustainable development.

A Look Back at Some Notable Trends of the Crypto Market 2024

The war between blockchains: Fierce competition

2024 sees a marked divide among the leading blockchains, as the race for the “Ethereum challenger” becomes fiercer than ever. Solana, which dominates the Layer 1 sector in 2023 and the first half of 2024, has begun to face strong competition from rivals such as Sui and Hyperliquid in the second half of the year.

Sui has had an impressive year of growth accounting for both market share and market sentiment of Solana. Meanwhile, Hyperliquid, a dedicated blockchain for derivatives exchanges, made a breakthrough with a $1.2 billion airdrop — the largest in crypto history — and quickly became one of the leading blockchains.

On the Layer 2 front, Base, backed by Coinbase, has emerged as the leading L2 solution on Ethereum, surpassing both Arbitrum and Optimism since its launch in August 2023. However, L2 tokens such as ARBs perform poorly, reflecting the challenge of maintaining value in the fiercely competitive L2 ecosystem.

Despite this, Ethereum maintains an important position in the DeFi sector with the leading TVL value, largely thanks to the support of the “DeFi whales”. However, the outflow from Ethereum L1 has largely moved to L2s on Ethereum, making Ethereum's true influence understated.

Despite leading the TVL, Ethereum is losing its appeal to retail users, in contrast to blockchains like Tron, which occupy the field of stablecoin trading with fast speeds and low costs.

In addition, blockchains such as BNB Chain also continue to assert their position with BNB reaching a new price peak for the year, while TRX consolidates its role as a stable platform for stablecoin trading. Solana, despite losing some of its market share to rivals, achieved a new ATH along with BNB, becoming one of the few L1 tokens from the previous cycle capable of achieving this feat.

Overall, 2024 marks fierce competition among blockchains, with Solana, Sui and Hyperliquid leading the wave of innovation, while Ethereum, while strong in DeFi, is slowly losing traction among mainstream users. The battle between blockchains shows the diversity of approaches, from specialization to ecosystem expansion, in order to meet the growing demand in the crypto market.

Bright Memecoins: Solana and Pump.fun lead the trend

In 2024, memenoins continue to occupy a central position in the crypto market thanks to their accessibility and low barriers to entry, attracting a large number of new users. The Solana ecosystem was at the center of this boom, highlighted by the Pump.fun platform — a tool that simplifies the token creation process and automatically integrates liquidity injection mechanisms into DEX exchanges. Since its launch in January 2024, Pump.fun has supported the launch of over 4.8 million memencoins, contributing significantly to the rise of altcoins in the market.

As of November 2024, Pump.fun not only achieved cumulative sales of more than 1.7 million SOL, or approximately $380 million, but also fueled the operations of more than 40,000 projects transitioning to the Raydium platform. This not only strengthens Solana's position in the memenoin ecosystem, but also significantly increases liquidity and transaction traffic on this blockchain.

In addition to Solana, other blockchains such as Tron and Sui have also quickly deployed similar strategies to capitalize on the popular wave of memenoin, expanding its influence in the crypto market. Meanwhile, the memenoin activity continues to dominate the altcoin market, which has yet to show signs of cooling off, confirming the long-term appeal of this asset class in 2024.

AI: The New Momentum for the Crypto Market

In 2024, artificial intelligence (AI) continues to be in the spotlight in the crypto market, thanks to the emergence of advanced technologies such as Zero-Knowledge Machine Learning (ZKML) and Optimistic Machine Learning (OPML).

These technologies have significantly improved data processing and privacy protection on the blockchain, even though the cost of ZKML is now 100 times higher than traditional solutions. At the same time, the skyrocketing demand for decentralized GPUs is evidenced by Render, a platform that has seen token prices increase tenfold since 2023.

About 34% of crypto projects now integrate AI into operations, up from 27% a year ago, with a focus on blockchain infrastructure projects. However, a paradox emerges: despite the sharp increase in the value of AI tokens, the actual use of these technologies is low, reflecting the gap between expectations and practical applications.

In particular, the AI-related memencoin craze has caused the value of these tokens to rise far beyond the network index, raising questions about the true value AI can bring to crypto.

To address the challenges of centralized power in AI, many blockchain projects such as Gensyn, Story, Near, and Starling Labs have pioneered decentralized solutions, from democratizing computing power to protecting intellectual property rights and verifying the origin of digital content.

However, the effective combination of AI and blockchain still requires sustainable value models to overcome short-term growth trends, laying the foundation for future long-term growth.