As historians look back at the momentous year of 2024, they may pinpoint it as a pivotal chapter in Bitcoin's journey toward mainstream acceptanceThis year, Bitcoin not only smashed its previous price records but also became a hot topic of discussion in the United States, with the approval of eleven Bitcoin ETFs marking a key milestone, not to mention the significant halving event taking place amidst global economic struggles underscored by relentless inflation.

This year highlighted Bitcoin's unique and multifaceted charismaIn countries grappling with severe economic woes, such as Argentina and Turkey, Bitcoin emerged as a safe haven against hyperinflation, while on Wall Street, it transformed into a recognized investment vehicle endorsed by financial giants like BlackRockFor crypto enthusiasts and developers, it functioned as a fresh canvas for innovation, and for governments across various nations, it shifted from being a perceived threat needing regulation to a potential opportunity awaiting to be harnessed.

The technology underpinning Bitcoin continued to evolve significantly

The Bitcoin network, once centered on the idea of "simplicity," began to explore and implement new capabilities, particularly with the reintroduction of operation codes like OP_CAT and groundbreaking research initiatives such as BitVMThese developments injected programmability and self-custody possibilities into Bitcoin’s foundational layerFurthermore, the rapid growth of second-layer networks presented viable solutions for transaction expansion, while the introduction of liquid staking derivatives opened pathways for generating profits from Bitcoin.

BlackRock launched the iShares Bitcoin Trust (IBIT) and achieved a record-breaking scale of $10 billion in assets under management within just a few weeks, a remarkable feat compared to the longer trajectory of previous gold ETFsThe inflow of institutional capital into Bitcoin has started to reshape retirement portfolios, igniting excitement on Wall Street while simultaneously causing concern among Bitcoin purists

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The surge of ETFs made Bitcoin more accessible than ever; currently, 62% of Americans can purchase Bitcoin as easily as they would buy shares of Apple, through brokerage accountsHowever, this burgeoning accessibility introduced its own set of issues, gradually obscuring the Bitcoin ethos of "not your keys, not your coins" in the frenzy of institutional trading.

Despite these challenges, Bitcoin consistently finds a way to thrive amid contradictionsIn the U.S., regulations more favorable to cryptocurrency have legitimized Bitcoin as an asset for institutions; in India, facing considerable regulatory pressure, 75 million users are leveraging Bitcoin as a tool for financial empowermentIn Turkey, where inflation soars above 50%, Bitcoin has become a choice for millions looking to safeguard their savings, and in Argentina, citizens are rushing to protect their assets with Bitcoin as their currency depreciates rapidly at a staggering rate of 140%. Throughout Latin America and Africa, Bitcoin transcends investment, representing a vital means of survival.

This adaptability has been a hallmark of Bitcoin’s evolution throughout 2024, with each region bestowing unique significance upon it based on its diverse needs

Far from undermining Bitcoin’s core objectives, this flexibility reaffirms its resilience and robust vitalityBitcoin acts as a mirror, reflecting the diverse demands of its users while steadfastly retaining its fundamental characteristics.

As the year draws to a close, Bitcoin stands at a critical crossroadsIt has garnered the legitimacy that early advocates envisioned, yet this legitimacy may not materialize in the form they originally anticipatedThe rise of ETFs, while initiating seismic shifts, has also reintroduced risks that Bitcoin originally sought to navigate away fromSimultaneously, the longstanding issues of network scalability are finally beginning to be addressed seriously, making the horizon of 2025 seem replete with hope and possibilities.

Will Bitcoin ETFs serve as a bridge to widespread adoption, or will they pave the way for centralization risks? Can Bitcoin staking enhance network functionality, or will it perpetuate a division within its core tenets? With the advent of Layer 2 solutions and tokenized Bitcoin, might we truly achieve scalability, or are we merely recycling familiar debates? Does the decline of the Gensler era signify the dawn of a new chapter for U.S

cryptocurrency? From the revival of OP_CAT to historic ETF fund inflows, from MEV on Bitcoin to explorations of recursive contracts, the narrative of Bitcoin in 2024 remains an ongoing saga.

The rise of institutional adoption, characterized by Bitcoin ETFs and MicroStrategy’s strategic moves, has reshaped the landscapeThe Bitcoin ETFs, such as BlackRock’s IBIT, achieved a staggering $20 billion in assets under management (AUM) within a mere 137 days, setting a recordIn comparison, the previously fastest-growing ETF (JEPI) took 985 days to reach the same thresholdNow, the total amount of Bitcoin held in ETFs has surpassed 1 million coins, constituting over 5% of the entire Bitcoin supplyHedge funds and financial advisors place significant investments in these ETFs, showcasing a growing interest from institutional investors.

Grayscale’s Decline has been notable; with a management fee as high as 1.5% and inefficient redemption mechanisms, Grayscale’s GBTC has lost its status as the market leader

A significant shift toward lower-fee ETFs has resulted in GBTC’s managed asset volume dropping by 152,000 Bitcoin within a month.

Under the leadership of Michael Saylor, MicroStrategy has amassed an astonishing 402,100 Bitcoin, valued at approximately $39.8 billionThe company has continuously increased its Bitcoin holdings by issuing convertible bonds and raising funds through stock revisionsDespite some controversy surrounding this approach, MicroStrategy remains one of the world’s largest Bitcoin holders while also being perceived as a vehicle for indirect Bitcoin investment, as its stock trades at a premium three times that of pure Bitcoin exposure.

With the influx of institutional investors, Bitcoin’s price volatility is gradually diminishingThe options trading available for ETFs has further solidified Bitcoin’s status as a long-term store of value, integrating it as a significant component in numerous investment portfolios.

While ETFs provide a convenient channel for retail investors and financial advisors, they have been criticized for their overreliance on custodial models, which contradicts the fundamental principles of Bitcoin advocating for self-custody.

The introduction of Ordinals and Runes through the upgrades of Taproot and SegWit has made NFT and fungible tokens a reality on the Bitcoin network

Although these innovations have fueled network activity, they also stirred debateCritics argue that they increase the network's burden, while supporters claim they enhance the sustainability of transaction fees, showcasing Bitcoin's permissionless innovation potential.

The popularity of Ordinals collectibles led to a dramatic surge in Bitcoin transaction activity, soaring transaction fees in tandemIn May 2024, during the peak of the Ordinals frenzy, transaction fees comprised over 75% of miner revenue, marking an unprecedented high.

The mempool size reached a peak of 350 million bytes at the end of 2023 but gradually normalized afterwards, while the introduction of Runes improved UTXO management efficiency.

Through the year, Ordinals, Runes, and BRC-20 took turns dominating transaction activities, with Runes leading in trading volume.

Magic Eden and OKX emerged as dominant platforms in the trading market, capturing over 95% of the transaction volume

The user experience enhancements and cross-chain bridging with Solana significantly boosted the adoption rate of Bitcoin NFTsHowever, despite the early performance surge of Ordinals collectibles, their prices have plummeted over 50% post-halving.

Protocols like Liquidium allow users to use Ordinals and Runes as collateral for loans, expanding the application scenarios of native Bitcoin DeFiAt the same time, various stablecoins are attempting to utilize Bitcoin as a collateral asset, although they still face technical hurdles.

As trends like memecoins, digital art, and decentralized marketplaces continue to redefine the ways Bitcoin is utilized, the speculative nature of these innovations also underscores Bitcoin's fundamental values of censorship resistance and permissionless innovation.

Tokenized Bitcoin, which unlocks its utility via EVM chains, has emerged as a dominant method rather than relying solely on second-layer networks

This year's market structure for tokenized Bitcoin dramatically shifted due to changes in the custodial model of WBTC.

Tokenized Bitcoin now occupies over 25% of the total locked value (TVL) in the DeFi sectorWhile Ethereum remains the primary testing ground for DeFi innovation, some Bitcoin-centric solutions, such as Bitcoin's second-layer network, are striving to decrease dependence on custodians, aligning more closely with the core decentralization principles of BitcoinHowever, these second-layer networks are still far from their official launch.

Early tokenized Bitcoin projects faltered due to low adoption rates, hacking incidents, or centralization risksWe label these failures as the "Bitcoin wrappers' graveyard," analyzing their key vulnerabilities.

The changes in BitGo's custodial model have challenged WBTC's dominance, causing a dip in user trustMeanwhile, Coinbase’s cbBTC has quickly risen, with locked BTC surpassing 20,000.

tBTC presents a decentralized tokenized Bitcoin model that mitigates centralization risks

With extensive adoption across protocols such as Aave and GMX, tBTC's supply expanded fourfold in 2024, reflecting the robust demand for decentralized solutions in the market.

Bitcoin-backed stablecoins are gaining traction, with 30-60% of collateral assets held in BitcoinHowever, these stablecoins may pose risks that Bitcoin users are hesitant to accept.

Stablecoins fully backed by Bitcoin remain a significant developmental direction, aligning better with the decentralized and open spirit of BitcoinWhile Bitcoin's second-layer networks receive considerable attention, the current EVM ecosystem and its mature applications still dominate Bitcoin's utilization within the DeFi space.

Despite the immense potential, Bitcoin’s second-layer networks are predominantly used for speculative activities, such as airdrop arbitrage, suggesting a need for more meaningful applications that resonate with Bitcoin’s core protocol in the future.

In conclusion, 2024 heralded a transformative year for Bitcoin as it navigated a myriad of challenges and opportunities, reaffirming its position not only as a cryptocurrency but also as a vital component of the modern financial system