Bitcoin’s Historic Year: Mainstream Adoption and Institutional Investment
A Record-Breaking Year for Bitcoin
Nearly 16 years after its network debuted, cryptocurrency has solidified its status as a mainstream financial instrument. The approval of 11 exchange-traded funds (ETFs) in January marked one of the most successful debuts in history, thanks to institutional demand. This influx helped push Bitcoin’s price to record highs of $100,000 in December, largely sustained by professional buyers.
Institutional Demand Drives Market Growth
The impact was felt across the broader market, with institutional investors leading a rise in over-the-counter (OTC) transactions. Kraken exchange has seen a 220% year-over-year increase in its OTC markets. ‘Long story short, OTC is going gangbusters right now,’ reportedly said Tim Ogilvie, head of institutional at Kraken.
Expanding Institutional Adoption
By the end of 2024, institutional adoption had expanded beyond ETFs, with publicly traded companies embracing Bitcoin on their balance sheets – a move that could prove both a good hedging strategy and a volatile investment. MicroStrategy has been leading this approach since 2020, amassing over 444,000 Bitcoin in its treasury.
MicroStrategy’s 21/21 Plan
On Dec. 23, the company submitted a proxy to the United States Securities and Exchange Commission (SEC) seeking shareholders’ approval to expand its Bitcoin purchases through 2025. This move aligns with MicroStrategy’s 21/21 Plan, which seeks to purchase an additional $42 billion worth of Bitcoin over the next three years by raising funds through equity sales and fixed-income securities.
MicroStrategy Calls Shareholders Meeting to Fund More Bitcoin Purchases
Raising Capital for Further Investment
MicroStrategy has called a special shareholders’ meeting to gain approval to expand its equity-issuance plan and fund further Bitcoin purchases. The company plans to increase its authorized shares of Class A common stock and preferred stock, allowing it more flexibility in raising capital.
Crypto.com Launches US Institutional Custody Service
Strengthening Presence in North America
Crypto.com has launched an institutional cryptocurrency custody service in the US as part of its expansion efforts. The service, called Crypto.com Custody Trust Company, is intended to provide custody solutions for US institutions and high-net-worth individuals.
Russia Bans Crypto Mining for 6 Years in 10 Regions
Energy Consumption and Growth Balance
Russia has approved a ban on cryptocurrency mining in 10 regions for six years, starting Jan. 1, 2025, and lasting until March 2031. This decision includes areas like Dagestan, Chechnya, and parts of Donetsk.
IRS Doubles Down on Crypto Staking Taxes: Report
Taxable Upon Receipt, Not Sale
The IRS has reaffirmed its stance that cryptocurrency staking rewards are taxable upon receipt, not upon sale, rejecting arguments from a second lawsuit filed by Joshua and Jessica Jarrett. The couple had sought to have their staking rewards treated as property, taxable only when sold.
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