The crypto industry in 2024 was marked by new record-breaking highs and a flood of institutional participation fueled by ongoing regulatory progress. Here are Luno’s highlights of 2024.
2024 marked a significant shift in institutional adoption of cryptocurrency, with major financial institutions like JPMorgan Chase, Goldman Sachs, and others ramping up crypto-related initiatives. Traditional asset managers, who were once skeptical, are now actively integrating digital assets into the mainstream financial ecosystem.
Among the key developments in 2024 was the approval of Bitcoin exchange-traded funds (ETFs) in January, making it much easier and more attractive for funds to diversify their activities into cryptocurrency. Multiple ETFs gained approval from the US Securities and Exchange Commission (SEC), marking the first time such investment products were cleared for launch in the US. Bitcoin ETFs now have assets of approximately $113 billion.
Historically, the Bitcoin halving has been the catalyst for pushing the asset past previous all-time highs. However, in 2024, Bitcoin defied this trend by surpassing its prior all-time high in March, fueled by the optimism surrounding ETF approval. Traditionally, the halving event—occurring roughly every four years—reduces the mining reward, cutting the supply of Bitcoin and adding an anti-inflationary effect. While the halving has often sparked a bullish momentum, leading to significant price increases, 2024 saw Bitcoin take a different path. After the initial surge, the largest digital asset by market cap experienced a relatively flat performance for much of the year, only to break out again in November.
Regulators globally have made significant strides in establishing frameworks that foster the responsible growth of the crypto industry. In South Africa, crypto asset service providers (CASPs) like Luno were officially recognised as financial service providers in 2024.
President-elect Donald Trump made crypto an important element of his campaign strategy, pledging to create a “strategic bitcoin reserve” and to position the US as the “crypto capital of the planet.”
Since his election, Trump has seemingly kept his pledges by nominating pro-crypto figures to several key federal roles, fueling optimism among crypto supporters. Most impactfully, Trump has nominated Paul Atkins to chair the Securities and Exchange Commission. Atkins, who was SEC commissioner between 2002 and 2008, is considered supportive of the cryptocurrency industry and has been a member and co-chair of the Chamber of Digital Commerce’s Token Alliance, a blockchain trade association, since 2017.
The US Federal Reserve cut interest rates by 0.5% in September, ending an extended period of aggressively high rate increases aimed at curbing rampant inflation. A further 0.25% reduction followed in November, and most investors, according to the CME FedWatch Tool, expect a sustained softer approach to monetary policy with continued low interest rates into 2025. But it all depends on how inflation plays out, which saw a slight spike in the US again towards the latter part of the year.
Historically, monetary easing has buoyed assets considered higher risk but with more attractive returns, such as stocks and crypto.
Memecoins arguably claimed the headlines in the crypto landscape in 2024, with originals like Dogecoin more than tripling in value throughout the year (with support by influential people like Elon Musk). Shiba Inu also saw substantial growth.
The coming year could bring further growth and adoption in this market if interest continues to rise at the same trajectory it did in 2024. It is, however, as with any digital asset, important to do your research before investing and only invest what you can afford to lose.
