From cointelegraph by Arijit Sarkar

The crypto industry experienced a remarkable resurgence in 2024, fueled by a Bitcoin bull run that pushed BTC’s market price above $100,000, restoring investor confidence and delivering substantial returns across the crypto market.

Amid the numerous significant milestones achieved throughout the year, it is easy to overlook the major challenges that industry players and investors faced and successfully navigated.

The cryptocurrency industry has demonstrated consistent resilience over the years, meeting challenges such as bad actors, ecosystem collapses, bear markets, legal disputes and geopolitical uncertainties. This adaptability positions the industry for continued evolution and potential disruptions in the future.

Additionally, certain decisions by individuals and authorities had uniquely detrimental impacts. Here, we explore some of the most significant challenges the crypto ecosystem collectively overcame in 2024.

Germany lost millions in untimely BTC sale

The hodl strategy — which involves long-term accumulation and retainment of Bitcoin BTC$93,515 investments — benefited BTC investors this year as market prices soared over $100,000 in December. Germany was one of the larger Bitcoin holders that made the costly decision of selling 50,000 BTC in July 2024.

Germany sold about 49,858 Bitcoin between June 19 and July 12 for roughly 2.6 billion euros ($2.8 billion). The German government had ordered the “emergency sales” of seized Bitcoin in June under the impression that the cryptocurrency’s value might drop by more than 10%.

Unfortunately for Germany’s price analysts, Bitcoin hit a new all-time high six months later, which would have brought the value of the 50,000 BTC to over $5 billion. 

The decision to panic sell Bitcoin proved disastrous to the German government.

Still, countries like Bhutan and El Salvador continued to invest and hold onto their Bitcoin holdings. As a result, both countries earned millions of dollars in unrealized gains.

Bitcoin ATM installations flatline

While an uptick in Bitcoin and cryptocurrency ATM installations is not a direct indicator of crypto adoption, the ecosystem helps reduce the proximity between digital assets and the end-user. 

Regulators globally have been actively cracking down on Bitcoin ATMs in an attempt to prevent bad actors from duping investors, hiding stolen assets or laundering money. On the other hand, major economies are promoting the installation of crypto ATMs to stay ahead of the innovation curve.

As a result, the overall growth of the crypto ATM ecosystem worldwide flatlined in 2024. In January, the global crypto ATM network comprised roughly 36,500 machines, which by the year-end grew to 38,600 machines. 

Despite countries like Australia doubling their ATM network to nearly 1,400 machines in 2024, the total number of global ATMs has remained stagnant since 2022 at an average of 38,000 machines.

Clearer regulations and operational licenses in the coming year are expected to improve the crypto ATM landscape and encourage more players to provide grassroots-level crypto access to the masses.

The journey from Bitcoin Runes to ruins

The Bitcoin Runes protocol was launched on April 2 as a more efficient successor to Bitcoin Ordinals and to improve the non-fungible token NFT$0.0000005357 inscription ecosystem. 

Bitcoin Runes was well-received initially by the Bitcoin community. In the first two months, Runes transactions dominated the Bitcoin blockchain, often taking up 60% of the entire bandwidth. 

The hype around Bitcoin Runes increased the Bitcoin network demand and momentarily helped miners maintain their income amid recently reduced rewards owing to the fourth halving event.

However, heading into July, the total number of daily transactions dedicated to Bitcoin Runes recorded a significant decline. By December, Runes transactions represented roughly 5% of all transactions on the Bitcoin blockchain.

In contrast, Ordinals regained interest among investors and currently take up the highest bandwidth on the blockchain after the original Bitcoin token. 

Regulations force closure of crypto services

Owing to the widescale mainstream adoption of crypto, regulators worldwide have realized the need for issuing operational licenses if they are to protect citizens from fraud and risks. In the process, well-established crypto exchanges were forced to wind down operations in various jurisdictions.

China

Chinese authorities continue to impose their 2022 crypto ban on the market as a way to minimize the drain of cash supply from its fiat economy. Despite the stronghold, Chinese players continue to dominate the crypto mining landscape. 

CryptoQuant data suggests that over 55% of the Bitcoin mining network is still controlled by Chinese mining pools despite an active ban on crypto trading. 

Hong Kong also imposed a strict licensing regime, requiring all crypto exchanges to apply for an operational license by May 2024. However, the Hong Kong Securities and Futures Commission (SFC) has accepted licensing requests from operators beyond the deadline.

India

India has expressed issues with the tax collection process implemented by several crypto exchanges. In total, 17 crypto exchanges, including Binance, WazirX and CoinDCX, were flagged for non-payment and collection of goods and services tax (GST) taxes. Cumulatively, crypto exchanges in India owe $97 million to the Indian government in unpaid GST taxes.

Litigation against Binance executives 

Top Binance executives — Binance founder and former CEO Changpeng “CZ” Zhao and the company’s compliance officer Tigran Gambaryan — were dragged into legal battles with authorities this year. 

CZ admitted to violating the Bank Secrecy Act (BSA) and failing to implement an effective Anti-Money Laundering (AML) program at Binance and was sentenced to four months in prison.

Gambaryan was initially hit with tax and money laundering charges in Nigeria. Unlike CZ, Gambaryan walked free from the initial lockup after the Nigerian government dropped all charges at the Federal High Court in Nigeria’s capital city of Abuja.

To Binance’s credit, the crypto exchange maintained investors’ trust in the platform and managed to retain its long-standing position as the top crypto exchange in terms of daily trading volume.

Conclusion

The events discussed above showcase the myriad of unique hurdles the crypto ecosystem overcame. Meeting such legal and operational challenges highlights the industry’s resilience and adaptability in the face of adversity.

From navigating regulatory crackdowns and unfavorable government decisions to managing the fallout from failed projects and legal disputes, the cryptocurrency space has demonstrated its ability to evolve and learn from past missteps. 

As global adoption continues to grow and regulations become clearer, the lessons of 2024 have reinforced the importance of strategic decision-making, long-term vision and a collective effort to build a more robust and inclusive financial ecosystem.

The progress made, despite these setbacks, positions the industry for a more sustainable and innovative future.