2024 Bitcoin Year-End Review: Coin Price Rises 131%, Not as Good as Last Year, TVL Surges 21 Times to Over $6.7 Billion

Author: Carol, PANews

In 2024, Bitcoin broke through the $100,000 mark in an upward trend, establishing a new milestone for the development of digital assets. The three keywords "ETF approval," "halving," and "U.S. elections" drove the market changes for Bitcoin throughout the year. Behind this overall picture, what specific changes in the trading market, on-chain fundamentals, and application aspects of Bitcoin are worth noting? What potential impacts do these changes have on the development in 2025?

PANews data column PAData has analyzed the changes in Bitcoin in 2024 through multi-dimensional data. Overall:

• Trading Market:

1. Bitcoin's annual increase reached 131.83%, lower than last year's 158.06%.
2. The main driving force behind the rise in Bitcoin prices this year was the gradually friendly and loose regulatory environment, rather than purely supply scarcity (halving).
3. This year, long-term holders had better profit levels, and they tended to reduce risk exposure earlier when the market approached overheating.
4. The trading market this year saw both volume and price increase. The average daily trading volume for the year was approximately $38.354 billion, an increase of 102.72% compared to last year. The total open interest at the end of the year was approximately $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, with a strong annual growth of 80.87%.

• On-Chain Fundamentals:

1. The average monthly active addresses for Bitcoin this year was approximately 780,300, a decrease of 17.75% from last year. This may indicate that, in a clear upward trend, long-term holding strategies dominate, and the market may shift to a low liquidity growth phase led by institutional investors.
2. The total on-chain transaction volume for the year was approximately 49.6658 million BTC, equivalent to $328 billion. The total volume of coin-based transactions increased slightly by 4.67% compared to last year.
3. The number of addresses holding between 100 to 1000 BTC increased by 11.21%, indicating a change in the trend of small balances in recent years, with a shift towards larger balances this year.

• Application Aspects:

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

• Outlook for Next Year:

1. The hawkish rate cuts under QT have tightened both short- and long-term liquidity, posing major pressure for Bitcoin to continue rising next year.
2. This year's rise is related to the expected friendly regulatory environment after the elections. If the regulatory environment can further loosen next year, it will benefit Bitcoin's continued rise.
3. BTCFi may further develop, but for its applicability to become the main logic for Bitcoin pricing, it still needs to achieve sustained expansion in application scale, which may still be difficult next year.

Trading Market: Price Up Over 131% for the Year, ETF Holdings Exceed 1.12 Million BTC

In 2024, Bitcoin's price rose from $42,208 at the beginning of the year to $97,851 at the end of the year (as of December 20), achieving an annual increase of 131.83%. On December 17, it strongly broke through the $100,000 mark, setting a historical record of $106,074, with the highest annual increase of approximately 151.31%. Although there was a slight pullback at the end of the year, the price still operated at historical highs.

Overall, this year, Bitcoin experienced three phases: "rise - consolidation - rise," which corresponded to the three major events: "ETF approval," "fourth halving," and "U.S. presidential election." In summary, this year's rise in Bitcoin cannot be solely attributed to the supply scarcity brought by halving, or at least not completely to the traditional logic of supply scarcity. The approval of ETFs and the results of the U.S. elections indicate that the main driving force behind the rise in Bitcoin prices is the gradually friendly and loose regulatory environment, which has attracted a large amount of institutional capital into the market, injecting liquidity and further boosting prices.

According to glassnode data, the proportion of profitable chips at the end of the year reached 90.16% (as of December 20), which is at a historical high. From a profit strategy perspective, LTH-SOPR/STH-SOPR (the output profit ratio of long-term holders/short-term holders) rose from 1.55 at the beginning of the year to 2.11 at the end of the year, with an annual average of 2.16. Especially after late November, this ratio was greater than 3 multiple times, peaking above 4. A value greater than 1 indicates that the profit level of long-term holders is higher than that of short-term holders, and the larger the value, the higher the profit level of long-term holders.

Overall, this year, long-term holders had better profit levels, and this advantage became more pronounced as the year progressed. Additionally, from the overall price perspective, it can be observed that the profit level peak for long-term holders appeared earlier than the price peak, indicating that long-term holders tend to reduce risk exposure earlier when the market approaches overheating.

This year's Bitcoin trading market saw both volume and price increase steadily, with rising prices accompanied by increased trading volume.

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

The futures market was also active. The total open interest grew from $10.915 billion at the beginning of the year to $30.948 billion at the end of the year, an annual increase of 183.53%, showing significant growth.

As one of the main factors driving the rise in Bitcoin prices, the asset holdings of various ETFs have been a focus throughout the year. According to statistics, the total holdings of Bitcoin ETFs rose from 619,500 BTC at the beginning to 11.2006 million BTC at the end of the year, with a strong annual growth of 80.87%. The rapid growth period coincided with the rapid rise in Bitcoin prices, occurring in February-March and after November.

Currently, BlackRock's holdings have reached 524,500 BTC, making it the largest ETF by size. In addition, Grayscale and Fidelity also hold significant amounts, with 210,300 BTC and 209,900 BTC, respectively. The holdings of other ETFs are relatively low, mostly below 50,000 BTC.

In addition to ETFs, an increasing number of 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 is MicroStrategy, which holds a total of 439,000 BTC, surpassing many ETFs. Additionally, leading companies in the North American Bitcoin mining sector, Marathon Digital Holdings and Riot Platforms, also hold relatively large amounts, exceeding 40,000 BTC and 10,000 BTC, respectively.

On-Chain Fundamentals: Decrease in Active Addresses, Increase in Large Addresses, Total Transactions Rise to 49.6658 Million BTC

This year, the average monthly active addresses for Bitcoin was approximately 780,300, a decrease of 17.75% from last year's 948,700, showing a significant decline. The average monthly active addresses were above 800,000 in January-April and November-December, but below 720,000 from May to October.

Although this trend is generally consistent with the price movement, it is noteworthy that, against the backdrop of Bitcoin prices reaching historical highs, the average monthly active addresses decreased throughout the year, and the highest monthly active addresses also declined. This change may indicate that, in a clear upward trend, long-term holding strategies dominate, and the market may shift from a high-frequency trading phase led by general investors to a low liquidity growth phase dominated by institutional investors.

This year, the total number of on-chain transactions for Bitcoin exceeded 188 million, an increase of approximately 29.66% compared to last year, marking two consecutive years of growth. The average monthly cumulative transaction count was 15.671 million, with October recording the highest transaction count at 20.477 million. Notably, during the price consolidation phase, the number of on-chain transactions was actually higher. This may be influenced by various factors, such as short-term arbitrage trading, address consolidation, contract liquidation, and so on.

The total on-chain transaction volume for the year was approximately 49.6658 million BTC, equivalent to $328 billion. The total volume of coin-based transactions increased slightly by 4.67% compared to last year. This year, the average monthly cumulative transaction volume was approximately 4.1388 million BTC, equivalent to about $27.3451 billion.

Overall, the relative changes in transaction counts and transaction volumes continue the differentiated pattern observed last year, with an increase in Bitcoin transaction counts and a decline in transaction volumes compared to 2022 and earlier. The main reason is the expansion of application layers in a high Bitcoin price environment, such as the explosion of the Ordinals protocol last year.

From the distribution structure of address balances, the number of addresses holding between 0.001 to 0.01 BTC, 0.01 to 0.1 BTC, and 0.1 to 1 BTC remains the highest, 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, decreasing by 3.94%, 2.74%, and 2.62%, respectively. Among all balance ranges, only the number of addresses holding between 100 to 1000 BTC and 1000 to 10000 BTC increased by 11.21% and 1.68%, respectively. This indicates a change in the trend of small balances in recent years, with a shift towards larger balances this year, possibly related to address consolidation and institutional capital accumulation.

Application Layer: From Inscriptions to BTCFi, TVL Surges 2117% Throughout the Year

This year, Bitcoin's application focus shifted from inscriptions to BTCFi, moving from asset issuance to asset usability. According to DeFiLlama data, the TVL of Bitcoin DeFi surged from $305 million at the beginning of the year to $6.755 billion at the end of the year, with an annual increase of 2117.11%, peaking at over $730 million. Currently, Bitcoin has become the fourth highest blockchain by TVL, following Ethereum, Solana, and Tron.

In terms of protocol types, the largest protocol on Bitcoin this year has shifted from the payment domain's Lightning Network to the staking domain's Babylon. As of December 20, Babylon's TVL reached $5.564 billion, accounting for 82.37% of the total. According to Dune (@pyor_xyz) data, as of December 23, the number of independent addresses for Babylon has exceeded 140,000, with a staking address growth rate of 100% in the last seven days.

Babylon's rapid development has driven a series of staking and re-staking protocols. Currently, in addition to Babylon, there are ten other protocols on the Bitcoin chain, including 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 Bitcoin's applications, further promoting its application expansion.

Outlook for Next Year

Bitcoin has experienced significant growth this year. Looking ahead to 2025, Bitcoin may enter a period of adjustment at the beginning of the year, with its subsequent performance continuing to be influenced by the macroeconomic environment, regulatory environment, and industry development, with opportunities embedded within the volatility.

From the macroeconomic perspective, the Federal Reserve has shifted to a hawkish rate cut at the end of this year, and more importantly, the background of quantitative tightening (QT) policy remains unchanged, which means that under the goal of controlling inflation, long-term liquidity is still tightening, and short-term liquidity growth may also slow down. Therefore, Bitcoin faces certain pressure to continue rising next year.

However, from this year's price trend of Bitcoin, its sensitivity to changes in the regulatory environment is higher. The results of the U.S. presidential election directly stimulated Bitcoin prices to break through $100,000. If there can be greater loosening of regulatory policies next year, it may provide momentum for Bitcoin's continued rise.

From the perspective of industry development, the rapid rise of BTCFi has pushed Bitcoin into a new stage of asset application. Staking protocols and other protocols may facilitate the network effects of these assets, further providing value support for Bitcoin's price. However, if Bitcoin's price is highly influenced by applicability, this will represent a new logic for rising prices that differs from supply scarcity or digital gold, and it places high demands on the scalability of applications, which may be difficult to achieve in the short term.