Bitcoin has become a mainstream financial instrument in 2024, with institutional adoption and record prices.
The approval of 11 exchange-traded funds (ETFs) in January led to a surge in institutional demand, with Bitcoin-focused funds attracting over $113.5 billion by the end of the year. This influx of capital drove Bitcoin's price to reach record highs of $100,000 in December.
Institutional investors also led a significant rise in over-the-counter (OTC) transactions, with Kraken exchange reporting a 220% year-over-year increase in its OTC markets.
In addition to ETFs, publicly traded companies have been embracing Bitcoin on their balance sheets. MicroStrategy, for example, has amassed over 444,000 Bitcoin in its treasury. The company has submitted a proxy to the United States Securities and Exchange Commission, seeking shareholder approval to expand its Bitcoin purchases through 2025.
MicroStrategy's aggressive Bitcoin strategy has set a precedent for other companies considering similar approaches. Institutional adoption of cryptocurrency is growing, which could potentially reshape investment strategies and corporate balance sheets.
Crypto.com has launched an institutional cryptocurrency custody service in the United States, aiming to provide secure custody solutions for U.S. institutions and high-net-worth individuals. This move aligns with the company's goal of expanding its operations in North America and catering to the growing demand for institutional-grade custody solutions in the cryptocurrency space.
Russia has approved a ban on cryptocurrency mining in certain regions for six years, starting from January 1, 2025. The ban aims to balance energy consumption and the growth of the crypto industry. Some regions will face full bans, while others will have partial restrictions, indicating a nuanced approach to regulation. This development could impact the global mining landscape as miners may seek more favorable jurisdictions for their operations.
The Internal Revenue Service (IRS) maintains that cryptocurrency staking rewards are taxable upon receipt, not upon sale. This position could set a precedent for how staking rewards are taxed in the United States. The outcome of the ongoing legal challenge filed by Joshua and Jessica Jarrett could have lasting effects on the treatment of digital assets and the responsibilities of investors in cryptocurrency taxation.