A New Era for Cryptocurrency
Bitcoin has had a historic year, solidifying its status as a mainstream financial instrument. After nearly 16 years since its network debuted, cryptocurrency has made significant strides in institutional adoption, with the approval of 11 exchange-traded funds (ETFs) in January. The ETFs’ launch marked one of the most successful debuts in history, thanks to institutional demand.
Institutional Demand Drives Record Highs
The influx of institutional investors helped push Bitcoin’s price to record highs of $100,000 in December. This surge was largely sustained by professional buyers. The impact was felt across the broader market, with institutional investors leading a rise in over-the-counter (OTC) transactions.
Kraken Exchange Sees 220% Increase in OTC Transactions
Kraken exchange has seen a significant increase in its OTC markets, with a 220% year-over-year increase. Tim Ogilvie, head of institutional at Kraken, reportedly said, "Long story short, OTC is going gangbusters right now." This surge in OTC transactions indicates that institutions are increasingly looking to take advantage of the growing demand for Bitcoin.
Beyond ETFs: Institutional Adoption Expands
By the end of 2024, institutional adoption had expanded beyond ETFs. Publicly traded companies have started 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 Seeks Shareholder Approval for Further Bitcoin Purchases
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. Behind the move is 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.
Crypto.com Launches US Institutional Custody Service
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. Digital assets held by US and Canadian customers will gradually transition to the new trust company.
Russia Bans Crypto Mining for 6 Years in 10 Regions
Russia has approved a ban on cryptocurrency mining in 10 regions for six years, starting January 1, 2025, and lasting until March 2031. This decision includes areas like Dagestan, Chechnya, and parts of Donetsk. Additionally, seasonal restrictions will be imposed in the Irkutsk, Buryatia, and Zabaikalsky regions to prevent energy shortages.
IRS Doubles Down on Crypto Staking Taxes
The IRS has reaffirmed its stance that cryptocurrency staking rewards are taxable upon receipt, not upon sale. The agency rejects 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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In-Depth Analysis: The Impact of Institutional Adoption on the Cryptocurrency Market
The institutional adoption of Bitcoin has had a significant impact on the cryptocurrency market. With the approval of 11 ETFs and the launch of Crypto.com’s US institutional custody service, institutions are increasingly looking to take advantage of the growing demand for Bitcoin.
The Rise of OTC Transactions: A Sign of Institutional Confidence
The surge in OTC transactions is a sign of institutional confidence in the cryptocurrency market. With a 220% year-over-year increase, Kraken exchange has seen significant growth in its OTC markets. This indicates that institutions are increasingly looking to take advantage of the growing demand for Bitcoin.
MicroStrategy’s 21/21 Plan: A Bold Move into the Future
MicroStrategy’s 21/21 Plan is a bold move into the future. With a goal of purchasing an additional $42 billion worth of Bitcoin over the next three years, the company is demonstrating its confidence in the cryptocurrency market. By increasing its authorized shares and raising funds through equity sales and fixed-income securities, MicroStrategy is positioning itself for success.
The Future of Cryptocurrency: A New Era of Institutional Adoption
The future of cryptocurrency looks bright, with institutional adoption on the rise. As more institutions look to take advantage of the growing demand for Bitcoin, the market is expected to continue its upward trend. With the launch of Crypto.com’s US institutional custody service and MicroStrategy’s 21/21 Plan, institutions are increasingly looking to invest in the cryptocurrency market.
Conclusion
Bitcoin has had a historic year, solidifying its status as a mainstream financial instrument. With institutional adoption on the rise and record highs being reached, the future of cryptocurrency looks bright. As more institutions look to take advantage of the growing demand for Bitcoin, the market is expected to continue its upward trend.
