“What caused the sharp growth of cryptocurrencies, will this trend continue in 2025 and what is the situation with regulation in Ukraine”, — write: epravda.com.ua
2024 was a turning point for the cryptocurrency industry. On December 5, Bitcoin, the first digital asset, broke the $100,000 mark, and Bitcoin’s market capitalization reached more than $2 trillion. This strengthens its position among the largest assets and global companies such as gold, Apple, Microsoft and NVIDIA. Bitcoin has already taken one of the leading positions among humanity’s most valuable assets, and global macroeconomic and political changes continue to stimulate the interest of investors and regulators in cryptocurrencies, bringing them from niche tools to the center of financial and economic discussions. Macroeconomic situation: cryptocurrencies as protection against inflation The world economy in 2024 faced significant changes. After a long period of tight monetary policy, the Federal Reserve began to cut interest rates. This decision increased global liquidity, prompting investors to seek assets to protect capital against inflationary risks. Against this background, Bitcoin has become the digital “gold standard”. With a fixed supply of 21 million coins, it is seen as a reliable tool to hedge the risks of devaluation of fiat currencies.Advertisement: Read also: What Ukraine is losing without a regulated cryptocurrency market Ether (ETH) also showed a significant increase of more than 30%, strengthening its position as the second cryptocurrency by capitalization. XRP, the third largest cryptocurrency by market capitalization, has shown impressive growth in 2024, increasing over 400% year-to-date and 200%+ in the last month. These indicators highlight the growing interest from both institutional and retail investors.Advertisement: According to data from CoinShares, in 2024 the total volume of funds involved in crypto investment products was $33.5 billion, which is a 200% increase compared to the previous year. DeFiLlama also recorded a significant inflow of capital: the volume of cryptocurrency trading on centralized exchanges increased by 15%, confirming the increasing liquidity of the market. A key driver of this growth was the launch of spot bitcoin ETFs in the US. On the first day of trading, the volume of transactions with these ETFs exceeded $4.6 billion, and by November 2024, the total volume of trading reached $500 billion. These tools have opened up the cryptocurrency market to institutional investors, who were previously limited by infrastructural and regulatory barriers. Institutional Adoption: New Perspectives Companies such as MicroStrategy and Marathon Digital continue to increase their positions in Bitcoin, viewing it as a strategic asset for their corporate portfolios. The launch of Bitcoin ETFs and options has made access to cryptocurrencies easier for institutional players while strengthening the market structure. These processes have led to a reduction in volatility and the creation of a more stable market that is becoming attractive to both large corporations and traditional financial investors. From presidential election to strategic reserve The 2024 US presidential election has also boosted investor interest in cryptocurrencies. Discussions on the creation of a strategic bitcoin reserve and statements by candidates supporting crypto-innovation have highlighted the growing acceptance of digital assets at the government level. These initiatives open up an opportunity for the US to take a leading role in the cryptocurrency ecosystem. The launch of spot ETFs, macroeconomic changes and institutional adoption have shaped the new landscape for cryptocurrencies. They are now an integral part of the global financial system. However, for further development, the market needs additional attention to the infrastructure and regulatory environment. And here the question arises: how to effectively use these trends in the local context? Prospects of crypto regulation in Ukraine Ukraine has a unique opportunity to occupy a significant place in the global crypto ecosystem. In order to implement innovations and maintain competitiveness in the global market, a clear regulatory and legal framework is needed. It will create the predictable environment necessary for both investors and businesses to thrive. Europe’s experience, in particular the implementation of MiCA (Markets in Crypto-Assets Regulation), demonstrates how thoughtful regulation can become a powerful driver of industry development. For example, according to Deloitte, in the second quarter of 2023, Europe attracted 48% of all global venture capital investments in crypto-startups, which confirms the growing interest of investors after the introduction of MiCA. For Ukraine, which is on the way to integration with the EU, MiCA can become not only a reference point, but also an opportunity to adapt the best European practices taking into account local specifics. Currently, two alternative draft laws proposed by the National Securities and Stock Market Commission and the Ministry of Digital Transformation have been developed. They offer different approaches to the taxation and regulation of cryptoassets. The current project, which is being developed by a parliamentary committee, provides for the taxation of transactions with cryptocurrencies at the level of 18% for individuals, including the military levy, as well as the obligation of exchanges to act as tax agents. At this stage, it is extremely important that all state bodies agree and adopt a single regulatory option that will satisfy the interests of all participants and ensure the full functioning of the regulatory system. This will avoid a situation of “tug of war” between different departments, which can slow down the implementation of the necessary regulatory framework. 27 countries have already chosen MiCA, and Ukraine may become the 28th country in this legal choice. No longer a niche asset, cryptocurrencies have taken center stage in the global financial system. For Ukraine, this is a unique opportunity to integrate into the global crypto-economy, create conditions for attracting investments, strengthen the startup ecosystem and become a regional leader in digital transformation. However, success depends on the prompt adoption of thoughtful and transparent laws that will ensure a balance between the interests of investors, business and the state.