2024 Bitcoin Year-end Review: The currency price rose 131%, which was not as good as last year, and TVL surged 21 times to exceed US$6.7 billion.

Author: Carol, PANews

In 2024, Bitcoin broke through the $100,000 mark in one fell swoop during its upward trend, setting a new milestone for the development of digital assets. The three keywords of “ETF approval”, “halving” and “U.S. election” have driven Bitcoin’s market changes throughout the year. Behind this overall picture, Bitcoin’s performance in the trading market, on-chain fundamentals and application levels Are there any specific changes worth watching? What are the potential impacts of these changes on development in 2025?

PANews data column PAData looks at the changes in Bitcoin in 2024 through multi-dimensional data. In general:

• Trading market:

1. Bitcoin’s annual increase reached 131.83%, which was less than last year’s 158.06%.
2. The main driving force behind the rise in Bitcoin prices this year is the gradually friendly and relaxed regulatory environment, rather than pure supply scarcity (halving).
3. Long-term holders have been better off this year, and long-term holders tend to reduce exposure earlier when markets are close to overheating.
4. This year's trading market has seen both volume and price increase. The annual average daily trading volume was approximately US$38.354 billion, an increase of 102.72% compared with last year. The total open interest at the end of the year was approximately US$30.948 billion, an increase of 195.79% from the end of last year.
5. The total holdings of Bitcoin ETFs reached 11.2006 million BTC, a strong growth of 80.87% throughout the year.

• On-chain fundamentals:

1. The average number of monthly active addresses on the Bitcoin chain this year is approximately 780,300, a decrease of 17.75% from last year. This may indicate that when the upward trend is clear, long-term holding strategies prevail, and the market may shift to a low-liquidity growth stage dominated by institutional investors.
2. The cumulative total on-chain transactions throughout the year was approximately 49.6658 million BTC, equivalent to US$3.28 trillion in US dollars. The total amount of currency-based transactions increased slightly by 4.67% compared with last year.
3. The number of addresses with balances between 100 and 1,000 BTC increased by 11.21%, which shows that the trend of small-amount address balances has changed in recent years, and this year has shown a trend of large-amount balances.

• Application level:

1. At the end of the year, Bitcoin’s TVL was approximately US$6.755 billion, with an annual increase of 2117.11%, of which Babylon’s TVL accounted for 82.37%.
2. Staking replaces payments (Lightning Network) as Bitcoin’s mainstream application.

• Outlook for next year:

1. The Eagle interest rate cut under the QT background has tightened both long- and short-term liquidity, which constitutes the main pressure for Bitcoin to continue to rise next year.
2. This year’s rise is related to the expected friendliness of the regulatory environment after the election. If the regulatory environment can be further relaxed next year, this will be conducive to Bitcoin’s continued rise.
3. BTCFi may develop further, but if applicability wants to become the main logic of Bitcoin pricing, it needs to achieve continued expansion of the scale of application. As far as next year is concerned, this may still be difficult.

Trading market: The currency price increased by more than 131% throughout

the year, and ETF holdings exceeded 1.12 million BTC

In 2024, the price of Bitcoin rose from US$42,208 at the beginning of the year to US$97,851 at the end of the year (as of December 20), with the annual increase reaching 131.83%. On December 17, it strongly broke through the $100,000 mark, setting a record high of $106,074, with the highest increase for the year being approximately 151.31%. Although a slight correction began at the end of the year, prices are still running at historically high levels.

Judging from the overall trend, this year, Bitcoin has experienced three stages of "rising - sideways - rising", which is basically consistent with the three major events of "ETF approval", "4th halving" and "U.S. presidential election". correspond. In general, the logic of Bitcoin’s rise this year is not solely due to the scarcity of supply brought about by halving, or at least not entirely the traditional logic of scarcity of supply. The approval of the ETF and the results of the US election have shown that the main driving force for the rise in Bitcoin prices is the gradually friendly and relaxed regulatory environment. This change has attracted a large number of institutional funds to enter the market, injecting liquidity into the market, further boosting The price rises.

According to data from glassnode, the profit chips at the end of the year have reached 90.16% (as of December 20), which is at a historical high. From the perspective of profit strategy, LTH-SOPR/STH-SOPR (output profit ratio of long-term holders/output profit ratio of short-term holders) increased from 1.55 at the beginning of the year to 2.11 at the end of the year, with an average of 2.16 for the year. Especially since late November, this ratio has been greater than 3 many times, and the highest was greater than 4. The ratio is greater than 1, indicating that the profitability of long-term holders is higher than that of short-term holders. The larger the value, the higher the profitability of long-term holders.

Generally speaking, long-term holders have better profitability this year, and this advantage will become more obvious towards the end of the year. In addition, based on the currency price, we can also find that the high profit level of long-term holders occurs earlier than the high price of the currency, which means that long-term holders tend to reduce risk exposure earlier when the market is close to overheating.

This year, the Bitcoin trading market has seen an increase in both volume and price. The steadily rising currency price is accompanied by an increase in transaction volume.

According to statistics, the average daily trading volume of Bitcoin throughout the year is approximately US$38.354 billion, with the highest single-day trading volume exceeding US$190.4 billion. The peak trading volume during the year occurred after November. The average daily trading volume in November and December was US$74.897 billion and US$96.543 billion respectively, significantly exceeding the previous monthly average of US$30.8 billion.

The futures market is also active. The total open interest increased from US$10.915 billion at the beginning of the year to US$30.948 billion at the end of the year, an increase of 183.53% throughout the year, a significant increase.

As one of the main factors driving the rise in Bitcoin prices, the asset holdings of various ETFs have always attracted much attention this year. According to statistics, the total holdings of Bitcoin ETFs rose from 619,500 BTC at the beginning to 11,200,600 BTC at the end of the year, a strong growth of 80.87% throughout the year. The rapid growth period is basically consistent with the period of rapid currency price rise, both from February to March and after November.

Currently, BlackRock’s holdings reach 524,500 BTC, making it the largest among all ETFs. In addition, Grayscale and Fidelity also have larger holdings, reaching 210,300 BTC and 209,900 BTC respectively. The holdings of other ETFs are relatively low, basically below 50,000 BTC.

In addition to ETFs, more and more listed companies have also become buyers of Bitcoin, which may bring more possibilities to the market. According to statistics, the company with the largest holdings currently is MicroStrategy, which holds a total of 439,000 BTC, exceeding the holdings of many ETFs. In addition, Marathon Digital Holdings and Riot Platforms, leaders in the field of Bitcoin mining in North America, also have relatively large holdings, exceeding 40,000 BTC and 10,000 BTC respectively.

On-chain fundamentals: active addresses fell, large addresses increased,

and total transactions increased to 49.66 million BTC

The average number of monthly active addresses on the Bitcoin chain this year is approximately 780,300, a decrease of 17.75% from last year’s 948,700, which is a significant decrease. Among them, the average number of monthly active addresses from January to April and November to December was more than 800,000, but the average number of monthly active addresses from May to October was less than 720,000.

Although this is basically consistent with the trend of currency prices, it is worth noting that in the context of Bitcoin prices reaching a record high, the average number of monthly active addresses throughout the year has declined, and the highest number of active addresses in a single month has also declined. , behind this change may mean that when the upward trend is clear, long-term holding strategies prevail, and the market may shift from the high-frequency trading stage of general investors to the low-liquidity growth stage dominated by institutional investors.

This year, the cumulative number of transactions on the Bitcoin chain exceeded 188 million, an increase of approximately 29.66% compared to last year, and an increase for two consecutive years. The average monthly cumulative number of transactions is 15.671 million, with the highest number of transactions in October, reaching 2047.74. It is worth noting that during the sideways price stage, the number of on-chain transactions is actually more. This may be affected by many factors, such as short-term arbitrage trading, address collation, contract liquidation, etc.

The cumulative total on-chain transactions throughout the year was approximately 49.6658 million BTC, equivalent to US$3.28 trillion in US dollars. The total amount of currency-based transactions increased slightly by 4.67% compared with last year. This year’s average monthly cumulative total transaction volume is approximately 4.1388 million BTC, equivalent to approximately US$273.451 billion.

In general, the relative change trend of the number of transactions and the total transaction amount still continues last year's differentiation pattern, that is, compared with 2022 and before, the number of Bitcoin transactions increased and the total transaction amount decreased. The main reason is the expansion of the application level in the high currency price environment, such as the outbreak of the Ordinals protocol last year.

Judging from the address balance distribution structure, the number of addresses with balances between 0.001 to 0.01 BTC, 0.01 to 0.1 BTC, and 0.1 to 1 BTC is still the largest, currently accounting for 97.24% of the total number of addresses. However, this year, the number of addresses in these three balance ranges has shown a downward trend during the year, with the numbers falling by 3.94%, 2.74% and 2.62% respectively. Among all balance ranges, only the number of addresses with balances between 100 and 1,000 BTC and 1,000 and 10,000 BTC increased by 11.21% and 1.68% respectively. This means that the trend of small balances in address balances in recent years has changed, and this year has shown a trend of large balances. This may be related to address sorting and institutional fund opening.

Application layer: From Inscription to BTCFi, TVL surged 2117% throughout

the year

This year, the application focus of Bitcoin has shifted from inscription to BTCFi, and has moved further from asset issuance to asset availability. According to data from DeFiLlama, the TVL of Bitcoin DeFi surged from US$305 million at the beginning of the year to US$6.755 billion at the end of the year, with an annual increase of 2117.11%, and the highest TVL once exceeded US$7.3 billion. Currently, Bitcoin has become the blockchain with the fourth highest TVL after Ethereum, Solana and Tron.

Judging from the type of protocol, the largest protocol on Bitcoin this year has changed from Lightning Network in the payment field to Babylon in the pledge field. As of December 20, Babylon’s TVL has reached US$5.564 billion, accounting for 82.37% of the total. According to data from Dune (@pyor_xyz), as of December 23, the number of independent addresses in Babylon has exceeded 140,000, and the growth rate of pledged addresses in the past seven days has reached 100%.

The rapid development of Babylon has led to a series of staking and re-pledge agreements. Currently, in addition to Babylon, there are 10 protocols on the Bitcoin chain: Lombard, SolvBTC LSTs, exSat Credit Staking, Chakra, Lorenzo, uniBTC Restaked, alloBTC, pSTAKE BTC, b14g, and LISA BTC LST. These staking protocols may bring network effects to the application of Bitcoin and further promote its application expansion.

Outlook for next year

Bitcoin has fully risen this year. Looking forward to 2025, Bitcoin is likely to enter a period of adjustment at the beginning of the year. Its performance thereafter will continue to be affected by the multiple influences of the macroeconomic environment, regulatory environment and industry development. Fluctuations also contain Take the opportunity.

From the perspective of the macroeconomic environment, the Federal Reserve turned hawkish at the end of this year and cut interest rates. More importantly, the quantitative tightening (QT) policy background has not changed, which means that under the control of inflation targets, long-term liquidity is still tight, and short-term liquidity is still tight. Growth may also slow down. Therefore, there is some pressure for Bitcoin to continue to rise next year.

However, judging from the price trend of Bitcoin this year, it is more sensitive to changes in the regulatory environment. The results of the U.S. presidential election directly stimulated the price of Bitcoin to exceed $100,000. If regulatory policies can be relaxed to a greater extent next year, it may provide impetus for Bitcoin to continue to rise.

From an industry development perspective, the rapid rise of BTCFi has pushed Bitcoin to a new stage of asset application. Staking protocols and other protocols may contribute to the network effects of these assets, which will further provide value support for the price of Bitcoin. However, if the price of Bitcoin is highly affected by its application, then for Bitcoin, this will be a new rising logic that is different from supply scarcity or digital gold, and this will have a high impact on the scale of the application. requirements may be difficult to achieve in the short term.