This year also saw cryptocurrencies make significant strides into the financial mainstream, with the US SEC approving Bitcoin and Ethereum ETFs earlier this year. Cryptocurrency has expanded to unprecedented heights and became a central topic of the recently concluded US election.
Mainstream adoption begins
Earlier this year, the SEC caused a stir when it approved ETFs from multiple crypto players. Financial giants such as BlackRock and Fidelity have significantly increased their investments in cryptocurrencies. Enhanced blockchain infrastructure with improved scalability and security features has attracted a wave of new users.
crypto tracker
As confidence in Bitcoin as a long-term store of value grows and the uses of cryptocurrencies diversify, retail investors are expected to increase their investments in cryptocurrencies even further.
In-house implementation takes the lead
Widespread interest in Spot Bitcoin ETFs has led to high-profile institutional adoption of the cryptocurrency. Digital assets are increasingly seen as reliable investments, and more investors of all ages are diversifying their portfolios to include cryptocurrencies. This surge confirms the growing confidence in this asset class as a viable financial instrument.
vote for change
No discussion of cryptocurrencies in 2024 would be complete without highlighting the role of cryptocurrencies in the US election. Cryptocurrency has moved from a niche financial product to an important idea in mainstream political discourse. President-elect Donald Trump has created a Cryptocurrency Presidential Advisory Council to draft strong regulations, allow individuals to mine Bitcoin, allow self-custody of digital assets, and reduce government oversight. promised to establish it.
President Trump also floated the idea of a strategic Bitcoin reserve that would position the United States as the dominant “Bitcoin superpower.” He proposed using Bitcoin reserves to reduce America’s national debt. The idea is ambitious but reflects the growing integration of cryptocurrencies into government strategy.
Globally, cryptocurrency hubs are thriving. The Swiss city of Zug, known as “Crypto Valley,” has become a hub of blockchain innovation, home to over 450 blockchain-based companies and 13 unicorns. This success is underpinned by supportive regulation and an attractive tax framework.
Tokenization unlocks new possibilities
This year, tokenization of real-world assets has emerged as a game changer. Blockchain technology has enabled the fragmentation of real estate, allowing investors to buy small shares of real estate previously reserved for the wealthy and earn dividends through smart contracts.
For example, US-based RealT uses the Ethereum blockchain to enable fractional ownership of real estate properties. Investors receive rental income through smart contracts. Beyond real estate, blockchain-powered smart contracts are automating processes such as loan payments and invoice processing, making systems more efficient, transparent, and secure.
Luxury goods, including rare works of art, are also entering the blockchain ecosystem through fractional ownership.
Stablecoins: the backbone of cryptocurrencies
As cryptocurrencies reach new heights, stablecoins have become an integral part of the ecosystem. Its value is pegged to a fiat currency or commodity, making it the preferred medium of exchange for cryptocurrency transactions. Stablecoins support a variety of use cases, from decentralized finance (DeFi) to cross-border payments.
In particular, asset-backed stablecoins reduce volatility and serve as reliable investment vehicles. Enhanced blockchain protocols enable interoperability between networks and accelerate adoption in remittances and trade finance. Over time, stablecoins will be able to integrate seamlessly with traditional financial systems.
India’s growing cryptocurrency market
Closer to home, India has led the world in cryptocurrency adoption for the second year in a row, according to a report by Chainalysis. Increasing trading volumes and growing interest in financial products such as staking and yield farming highlight the maturation of India’s crypto market.
With a wealth of Web3 talent, India is well-positioned to become a global hub for cryptocurrency innovation. As debates over regulatory frameworks continue, the need for clear and constructive regulation has never been more important in a country where interest in crypto assets is so high.
Future prospects
Looking ahead to 2025, much will depend on the implementation of President-elect Trump’s cryptocurrency proposals and the drafting of related legislation. Bitcoin and Ethereum are likely to continue their growth trajectory, and decentralized finance (DeFi) platforms are expected to become more tightly integrated with traditional financial systems.
2024 will be a watershed year for cryptocurrencies, marked by mainstreaming of cryptocurrencies, historic price milestones, and important steps towards policy formation. This year’s developments are starting to take shape, setting the stage for the future of decentralized finance.
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of Economic Times)
