The meme coin market experienced significant volatility in December, with their market capitalization surging to $137 billion before plummeting to $92 billion, resulting in a loss of over $40 billion.

A Notable Decline

The overall market cap for meme coins dropped by 30%, signaling a slowdown in demand for meme-based tokens. CoinMarketCap data shows that on December 1st, the total market cap was $120.14 billion, peaking at $137.06 billion on December 9th, then falling by 32.38% to $92.67 billion by December 23rd.

By the end of the month, the market cap stood at $98.72 billion, an 18% decline. A key driver of the meme coin surge was the listing of PEPE on exchanges like Binance.US and Coinbase, which helped propel its price and market cap. On December 7th, following its Binance.US listing, Pepe surpassed UNI in market cap, with its value soaring to over $11 billion.

Staggering ROI

Throughout the year, savvy traders profited significantly, such as one who invested $3,000 in Pepe in April and saw it grow to $46 million by May. In December, another trader, after holding $27 worth of Pepe for over 600 days, transferred $52 million worth of tokens, yielding a whopping 1,900,000x return on investment, according to Lookonchain analytics.

The cryptocurrency market experienced substantial growth in 2024, spurred by several key events such as the launch of Bitcoin ETFs, the halving, and Donald Trump once again becoming U.S. President. Naturally, some cryptocurrencies vastly outperformed others this year.

Meme Coins Dominated 2024

While Bitcoin posted an impressive 121% gain between January 1st to December 24th, the altcoin market outperformed it by a wide margin, with some altcoins posting gains as high as 1.84 million percent.

Leading the pack was Fartcoin, a meme coin launched in mid-October, which skyrocketed by an extraordinary 1,847,357% after Trump won the presidential election. Other major gainers included Mantra (8,776%), Virtuals Protocol (6,068%), and Ondo (1,758%), which capitalized on the growing demand for cryptocurrencies with real-world use cases such as RWA tokenization and the integration of AI into decentralized applications.

Altcoins Soar As BTC Makes Headlines

Aerodome, a decentralized exchange protocol on Coinbase, surged by 1,672%, and meme-driven tokens like Pepe gained 1,249%. The overall success of these altcoins reflected the rising interest in utility-focused and meme-based projects, as the market embraced cryptocurrencies that offered tangible applications or had a strong cultural following.

In any case, this year saw a clear trend of utility and novelty driving the altcoin boom, demonstrating the evolving nature of the crypto market. Still, Bitcoin continues to make headlines, as not only is it widely seen as a viable long-term investment by various institutions like Metaplanet, MicroStrategy, and KULR Technology, but both the U.S. and Russia have also started implementing their own Bitcoin reserve strategies.

Approximately $1.7 billion in crypto was lost due to the theft of private keys in 2024. In its annual Web3 Security Report, Hacken, a reputable cybersecurity firm, emphasized that private key theft continues to be the most critical threat for crypto investors worldwide.

Private Keys Continue To Be Targeted

According to Hacken, smart contract exploits are significantly less frequent compared to the theft of private keys. In 2024, access control vulnerabilities, which are closely related to private key compromises, accounted for most crypto hacking-related losses. This represents nearly $1.7 billion lost this year.

By comparison, smart contract vulnerabilities contributed just 14% of total losses in 2024, highlighting the dominant risk posed by unauthorized access and private key theft. Private keys are alphanumeric strings generated by crypto wallets, used to authorize transactions and verify ownership. They play a crucial role in encrypting data and safeguarding assets against theft.

Main Reasons For Theft

Hacken also outlined four key reasons why private keys are often stolen, namely the use of insecure management platforms, falling victim to social engineering attacks, improper data backups, and weaknesses in single-signature crypto wallet schemes.

According to the firm, the largest exploit of 2024 involved the hack of the centralized Indian crypto exchange WazirX, where over $230 million worth of digital assets were stolen. Despite having a robust multi-party security system in place, the exchange experienced a breach due to unauthorized fund transfers through its wallets.

KULR Technology Group, Inc. has acquired 217.18 BTC at an average price of $96,556.53. This purchase marks the beginning of a broader plan to allocate up to 90% of excess cash into crypto, following the lead of industry giants like MicroStrategy. After revealing the Bitcoin strategy, KULR saw its stock surge by nearly 40% in value.

A Novel Strategy

As announced on Thursday, KULR acquired the aforementioned Bitcoin at an average price of $96,556.53 per coin. This marks just the first step in a series of purchases, with the company planning to invest up to 90% of its surplus cash into BTC. To manage its crypto assets, KULR has partnered with Coinbase Prime for custody solutions and self-custodial wallet services.

CEO Michael Mo shared that the decision to purchase Bitcoin was heavily inspired by MicroStrategy and its Executive Chairman and Co-Founder, Michael Saylor. To gauge shareholder support for this move, KULR conducted a survey, which showed strong approval for the initiative, with Mo revealing that they received an overwhelmingly positive response in favor of buying BTC.

A Growing List

KULR joins a growing list of companies incorporating Bitcoin into their treasury reserves. Just days earlier, Matador Technologies, based in Canada, announced it would add $4.5 million in Bitcoin to its balance sheet as part of a long-term capital preservation strategy. On December 20th, Quantum BioPharma, a biopharmaceutical firm, revealed it had invested $1 million in Bitcoin and other cryptocurrencies. Meanwhile, Metaplanet in Japan recently made its largest Bitcoin purchase to date, acquiring nearly 620 BTC.

The trend of corporate Bitcoin adoption gained momentum in 2020 when MicroStrategy made its first significant investment. Today, the company holds over 444,000 BTC and plans to expand its holdings by an additional $42 billion, subject to shareholder approval.

Rune transactions on the Bitcoin network have dropped to new lows, losing their dominant position compared to earlier this year, and the Bitcoin Rune protocol is seeing minimal daily fees, raising concerns in the market. Speculation is growing that increased interest in meme coins and AI agents is behind this decline in Bitcoin Rune activity.

Decline In Bitcoin Rune Transactions

Recent data shows a significant drop in Rune activity since its April launch. As of December 25th, Rune transactions now account for just 1.67% of daily Bitcoin transactions, compared to over half earlier in the year. This suggests that the initial excitement around Rune is fading, with a corresponding decline in transaction fees, which have remained under $250,000.

Impact Of Meme Coins And AI

Runes introduced a technological leap by supporting multiple token standards on the Bitcoin blockchain. However, the recent decline in activity points to a shift in investor focus, with meme coins like Dogecoin (DOGE) and FLOKI, as well as AI agents, capturing more attention. These sectors may be contributing to reduced interest in Bitcoin Runes.

Bitcoin Price, ETFs, And Future Outlook

Despite the drop in Rune transactions, Bitcoin recently reached an all-time high of $108,202 before falling to $96,102. As Bitcoin stabilizes, attention may return to projects like Runes. Meanwhile, Bitcoin ETFs have seen significant outflows, with $338.4 million withdrawn on December 25th alone. Despite market volatility, analysts expect a potential rebound for Bitcoin.

The $PENGU airdrop was one of the most highly anticipated crypto events of 2024.

Strong Engagement

After the airdrop, the $PENGU token dropped by 50%. Crypto analyst Ignas DeFi shared an update on X, revealing that 91% of the airdrop had already been claimed. Key stats included 91% claimed (1.1M addresses), 74% sold or moved tokens to another wallet (like a CEX), 16% holding, with 3.5% buying more, and 70% of the supply circulating.

Of the 23.1 billion $PENGU tokens allocated for the airdrop, 21 billion have been claimed, with only 2.1 billion left to be distributed. A large portion of recipients sold or transferred their tokens, a typical trend with airdrops. However, 16% of claimants are holding their $PENGU, with 3.5% even buying more.

Token Surge

The $PENGU token surged over 600% in just one month, partly due to its listings on Bithumb, Crypto.com, and Hyperliquid. The token is  also already listed on major exchanges like Binance, OKX, and Bybit.

With a market cap above $2 billion, analysts believe $PENGU could reach $10 billion in the current bull market. Despite heavy sell-offs, the $PENGU airdrop signals strong bullish sentiment. With 91% claimed and 16% held, $PENGU looks poised to be more than just a temporary airdrop.

Former FTX Executives Caroline Ellison and Ryan Salame have reportedly had their prison sentences reduced due to their cooperation with prosecutors and good behavior while incarcerated. Both Salame and Ellison pleaded guilty to criminal fraud charges and multiple counts of conspiracy and fraud, respectively. Their guilty pleas, made in 2023, helped avoid lengthy trials for both themselves and the prosecution. They were sentenced in May 2024.

Sentence Reductions
In the U.S. federal prison system, inmates can earn sentence reductions by maintaining good behavior and participating in rehabilitation programs. Ellison, who was sentenced to two years in prison, started serving her term at the Danbury Federal Correctional Institution on November 7th. Initially set for release in October 2026, her release date has now been moved up to July 20th, 2026, shaving more than three months off her sentence.

Salame, sentenced to 7.5 years in federal prison, began his sentence in October. Originally slated for release in April 2032, his release date has now been adjusted to March 1st, 2031, a reduction of over a year. His attorneys have also remained silent on the matter, but a spokesperson representing the Bureau of Prisons explained that inmates can shorten their sentences for good behavior under the 2018 First Step Act

The Fall Of FTX
FTX, once one of the leading cryptocurrency exchanges in the world, collapsed in late 2022. Founded by Sam Bankman-Fried, the exchange was highly regarded within the crypto community and even attracted endorsements from high-profile public figures.

However, its downfall began when concerns about its connections to Alameda Research, a crypto hedge fund led by Caroline Ellison, led to a rush of withdrawals by users. Following the collapse, Bankman-Fried, Ellison, and Salame were all arrested on charges of criminal fraud. Sam, the mastermind behind the operation, was sentenced to 25 years in prison. His current prison records do not show a release date.

AI agents became tremendously popular in 2024, and for good reason. These are intelligent systems that assess their surroundings, make decisions based on data, and take actions to meet specific goals. Nicolai Sondergaard, Research Analyst at Nansen, shared his insights on the future of AI agents and which ones to watch out for in 2025.

Virtuals Protocol

One of the most prominent examples of an AI token gaining traction this year is Virtuals Protocol (VIRTUAL), which has surged by a staggering 10,359% year-to-date. This growth has seen the token rise to over $3.1 at the time of writing.
Moving forward, analysts expect continued growth for VIRTUAL, assuming investors do not sell prematurely. This is because profit-taking could lead to a drop below the $2.021 support level, potentially sending the token crashing down to $0.502.

AI Meme Coins
The AI trend has even infiltrated the meme coin market, with tokens like Turbo (TURBO) posting a remarkable 3,000% increase year-to-date. Despite some sideways movement in recent weeks, TURBO could soon experience a breakout, potentially surpassing the $0.0134 mark.
The AI meme coin trend has also elevated coins like Act 1: The AI Prophecy (ACT), Goatseus Maximus (GOAT), and Fartcoin (FARTCOIN) to new heights. Due to the high demand and speculation, FARTCOIN even reached a market cap of $1.15 billion. Looking ahead to 2025, as both AI and meme coins continue to generate interest, it is likely we will see more AI meme coins emerging in the market.

AI-DePIN
While AI and DePIN are distinct sectors within the cryptocurrency world, the intersection of these two concepts is starting to influence the market. The DePIN trend had a significant impact in the latter part of 2024.

This can be seen in the performance of AIOZ Network (AIOZ), which experienced a 569% rise over the past 12 months. AIOZ reached above the $1.00 threshold before pulling back to trade around $0.95. AIOZ remains a key player in this space, and maintaining $1.00 as support could drive further upward movement. However, if AIOZ loses the $0.92 support level, it could fall to around $0.55, completely derailing its bullish outlook and leading to potential losses for investors.

Shiba Inu (SHIB) recently saw its burn rate experience a remarkable surge of nearly 100%, with 6.26 million SHIB no longer being in circulation, which has led to a wave of optimism among investors, as many believe this could drive up the price of the meme cryptocurrency.

Broadening Utility

The excitement surrounding the project has been further amplified by the recent launch of SHIB: The Metaverse on Christmas, a new initiative that integrates the Cross-Chain Interoperability Protocol (CCIP) by Chainlink (LINK) to enable multi-chain functionality.

This development is seen as a key step toward broadening the utility of the Shiba Inu ecosystem. Additionally, there have been growing speculations about the upcoming TREAT token, which could add to the bullish sentiment surrounding the project.

Looking Ahead

Whale activity has also been a significant factor in fueling optimism. A massive 2.88 trillion SHIB, valued at $65.7 million, was acquired through BTCTurk, indicating strong institutional interest and suggesting that large investors see long-term value in Shiba Inu. This kind of accumulation by whales often signals confidence in a potential price increase, further adding to the bullish momentum.

Despite the current price volatility, analysts remain hopeful about a price rebound. Projections suggest that SHIB could reach $0.000029, driven by a combination of factors such as the reduced supply resulting via the burn, ongoing and active community engagement, and the positive developments within the Shiba Inu ecosystem.

Binance Thailand has expressed strong support for the idea proposed by former Prime Minister Thaksin Shinawatra to turn Phuket into a Bitcoin (BTC) payment sandbox. This initiative aims to attract a new wave of tech-savvy tourists and investors, positioning Thailand as a hub for digital currency innovation.

Cautious Optimism

Nirun Fuwattananukul, the CEO of Gulf Binance, emphasized the potential Thailand has in terms of taking a leadership role in the global digital economy. He acknowledged the exciting opportunities presented by cryptocurrencies but also urged caution, pointing out the risks associated with market volatility and the potential impact on monetary stability.

Fuwattananukul highlighted the necessity for a comprehensive regulatory framework to manage these risks effectively. Such a framework would not only provide clear guidelines for businesses and consumers but also help safeguard the broader economy.

A Testing Ground

He suggested that a pilot project in Phuket could serve as a valuable testing ground, allowing Thailand to learn the best international practices and fine-tune its approach to integrating digital currencies into its financial system.

The successful implementation of such a project would require collaboration between key regulatory bodies, including the Bank of Thailand and the Securities and Exchange Commission (SEC). By working together, these institutions can ensure that local cryptocurrency policies are robust while simultaneously promoting innovation and maintaining financial stability.

Russia has begun incorporating Bitcoin (BTC) and other cryptocurrencies into international trade, a strategic move prompted by recent legislative reforms aimed at mitigating the impact of Western sanctions, Finance Minister Anton Siluanov announced.

The Future Of Global Trade

The decision to add Bitcoin for international trading purposes is part of a long list of changes which include the legalization of cryptocurrency mining and the facilitation of foreign exchange transactions using digital currencies, positioning Russia as a global leader in Bitcoin mining.

Minister Siluanov emphasized that digital payments are not only the future of global trade but are already being actively utilized in Russia, with plans to expand their use in the coming years. President Vladimir Putin has also weighed in on the shift, criticizing the ongoing dominance of the U.S. dollar in global finance.

Bolstering Trade Relations

After President-elect Donald Trump announced his plans for implementing a national strategic Bitcoin reserve, President Putin announced similar plans for Russia. Putin also advocated for the use of alternative assets, particularly Bitcoin, as a means to reduce dependency on the dollar.

This policy shift marks a significant step for Russia and its efforts to develop a more resilient economic strategy, as it seeks to navigate increasing geopolitical tensions and trade restrictions. By embracing cryptocurrencies, Russia is positioning itself to diversify its financial ecosystem and strengthen its trade relations, especially with countries seeking alternatives to traditional financial systems.

The Internal Revenue Service (IRS) maintains that crypto staking rewards are taxable income, challenging investor Joshua Jarrett and his argument that they should be classified as new property instead. According to the IRS, tokens earned through staking are subject to taxation, despite a previous legal resolution that favored Jarrett.

Back And Forth

Jarrett contends that staking rewards represent new property and should not be taxed until they are sold or otherwise realized as income, prompting him to take legal action once again. The outcome of this case could have far-reaching implications for U.S. crypto investors as regulatory scrutiny intensifies.

In his current lawsuit, Jarrett is seeking a refund of $3,293 in taxes paid on 8,876 Tezos tokens he earned through staking. This is not his first legal challenge regarding the issue as in 2022, Jarrett filed a similar suit and eventually received a refund. However, the case was dismissed without establishing a legal precedent because the government issued the refund before oral arguments took place. Since then, crypto staking has become more widespread, leading the IRS to reevaluate its policies.

High Stakes

The IRS argues that Jarrett should pay taxes on the tokens based on their market value when they were received, reinforcing its position that staking does not generate new taxable assets. This decision is in line with broader efforts by the IRS to increase oversight of cryptocurrency activities. In 2023, the agency introduced new reporting forms for crypto income, brought in blockchain experts, and began utilizing AI tools to detect tax evasion.

Although the timeline for resolving this case is uncertain, the stakes are high. If Jarrett wins, it could mark a significant victory for U.S. crypto investors and potentially change the way staking rewards are taxed across the country. However, if the IRS prevails, it will solidify its position to tax staking rewards as immediate income.