Crypto Biz: The Year of Bitcoin

Bitcoin has had such a historic year! Nearly 16 years after its network debuted, cryptocurrency solidified its status as a mainstream financial instrument with the approval of 11 exchange-traded funds in January.

The ETFs’ launch marked one of the most successful debuts in history thanks to institutional demand, with Bitcoin-focused funds attracting over $113.5 billion by the end of the year. This influx helped push Bitcoin’s (BTC) price to record highs of $100,000 in December, 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, for instance, 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. 

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. On Dec. 23, the company submitted a proxy to the United States Securities and Exchange Commission seeking shareholders’ approval to expand its Bitcoin purchases through 2025. 

Some may say Bitcoin is now far from its ethos centered around principles of decentralization, but the core ideals remain embedded in its network, operating independently and allowing individuals anywhere to store and transfer wealth. 

This week’s Crypto Biz also explores Crypto.com’s new custody service, Russia’s partial ban on crypto mining and taxes on staking rewards in the US. 

MicroStrategy calls shareholders meeting to fund more 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. MicroStrategy had already purchased over 444,000 BTC as of Dec. 24, with plans to accelerate the coin acquisitions. The company has seen its stock value jump over 420% in 2024, largely driven by its Bitcoin strategy.

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. This move aligns with Crypto.com’s goal to strengthen its presence in North America, including the US and Canada. In December, US President-elect Donald Trump met with the company’s CEO, Kris Marszalek, at Trump’s home in Mar-a-Lago to discuss crypto policies.

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 Jan. 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, particularly from November to March each year. The bans and restrictions aim to balance energy consumption and the growth of the crypto industry, though key mining regions like Irkutsk will see only partial restrictions instead of full bans. The restrictions were refined from earlier proposals that included broader mining bans.

IRS doubles down on crypto staking taxes: Report

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. However, the IRS insists that rewards are considered taxable income at their market value when received. The case may set a significant precedent for how staking rewards are taxed in the US. This marks the continuation of the Jarretts’ legal challenge, which began in 2021, regarding taxes on staking rewards earned from Tezos tokens.

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