Crypto-Lending in 2024: A Rally to Remember

Abstract: In 2024, Bitcoin solidified its role as a cornerstone of the global economy, driven by historic price surges, institutional adoption, and pro-crypto policies under Donald Trump’s re-election. Key milestones included Bitcoin surpassing $100,000 USD, the approval of the first U.S. spot Bitcoin ETF, and record inflows from institutional investors. The year also saw unprecedented growth in crypto-backed lending, with decentralized finance (DeFi) platforms reaching $50 billion USD in active loans, while centralized finance (CeFi) platforms remained dominant for Bitcoin-backed loans. APX Lending emerged as a leader in Canada by collaborating with regulators to establish secure and compliant crypto lending solutions. Looking ahead, the industry is poised for innovation, with platforms like APX Lending exploring new opportunities in regulated, cross-collateralized lending.

As 2024 comes to a close, Bitcoin continues to redefine the financial landscape with record-breaking growth and increasing institutional adoption. From a historic price rally to surging demand for crypto-backed loans, 2024 has solidified Bitcoin’s position as a cornerstone of the digital economy. Below, we examine this year’s key milestones and their implications for the lending industry.

In 2024, Bitcoin’s price shattered expectations, crossing the $100,000 USD threshold and peaking at $108,135 USD (+185% YTD) on December 17. This remarkable growth stemmed from three core factors:

• The 2024 Bitcoin Halving
• Rising Institutional Adoption
• The 2024 U.S. Presidential Election

The Bitcoin Halving

Bitcoin’s algorithmic halving event in 2024 reduced its new supply by 50%, amplifying its scarcity and deflationary appeal. Paired with strong demand from both institutional and retail investors, the halving served as a catalyst for upward price momentum.

While Bitcoin’s historical price cycles suggest continued appreciation into early 2025, past trends also warn of potential pullbacks in late 2025 and beyond. These cyclical dynamics emphasize the importance of measured optimism as Bitcoin matures further.

Institutional Adoption Reaches New Heights

Institutional participation surged in 2024, driven by high-profile endorsements and expanded product offerings. BlackRock and Fidelity led the charge, while the approval of the first spot Bitcoin ETF in January unlocked access for traditional investors. In November, U.S.-based ETFs had amassed net inflows of $6.46 billion USD, underscoring Bitcoin’s growing acceptance as a mainstream asset.

Capping off this momentum, MicroStrategy (NASDAQ: MSTR) joined the Nasdaq 100 Index in December, marking a milestone for Wall Street’s recognition of Bitcoin’s role in diversified portfolios.

Trump’s Election: A Pro-Crypto Policy Shift

Donald Trump’s re-election in November brought fresh optimism to the crypto industry. After ceremonially reopening the New York Stock Exchange, Trump declared his administration’s commitment to “doing something great with crypto,” including plans for a strategic U.S. Bitcoin reserve. His appointment of cryptocurrency advocate Paul Atkins to lead the SEC signals a potential regulatory transformation that could accelerate institutional adoption in both the U.S. and Canada.

While uncertainties remain, the crypto community views Trump’s policies as a promising catalyst for further integration of digital assets into traditional financial systems.

The Lending Boom: DeFi vs. CeFi

Soaring crypto prices in 2024 fueled unprecedented demand for over-collateralized crypto-backed loans. Borrowers, both retail and institutional, turned to these loans to unlock liquidity without selling their assets, preserving upside potential and avoiding capital gains taxes.

• DeFi Growth: Decentralized finance (DeFi) platforms like Aave and Compound surpassed $50 billion USD in active loans, a 253% year-over-year increase.
• CeFi Dominance: Centralized finance (CeFi) platforms maintained their edge in Bitcoin-backed lending, offering greater stability, compliance, and security compared to DeFi alternatives.

As Bitcoin cements its place in the global economy, the potential for innovation in crypto-backed lending is boundless. Regulated and secure platforms like APX Lending are paving the way for a new era of financial solutions, including cross-collateralized loans that combine crypto with traditional assets such as real estate. For a detailed comparison of CeFi and DeFi lending models, see APX Lending vs. Aave: Comparing CeFi and DeFi Crypto Lending Platforms.

Key Takeaways

• Bitcoin’s Historic Rally: Bitcoin crossed $100,000 USD, peaking at $108,135 USD (+185% YTD), driven by the halving, institutional adoption, and U.S. election outcomes.
• Institutional Momentum: Major players like BlackRock and Fidelity drove $6.46 billion USD in net ETF inflows in November, cementing Bitcoin’s mainstream appeal.
• Pro-Crypto Policies: Donald Trump’s plans for a U.S. Bitcoin reserve and regulatory reforms are expected to boost institutional adoption.
• Lending Boom: Crypto-backed loans surged, with DeFi platforms experiencing 253% growth while CeFi remained dominant for Bitcoin collateral.
• APX Lending’s Leadership: APX worked with the OSC to create a regulatory framework for crypto-backed lending in Canada, setting new industry standards.
• Future Opportunities: Regulated solutions like APX Lending’s cross-collateralized loans are poised to redefine crypto-backed lending in 2025 and beyond.

About the Author

Andrei Poliakov is a Canadian entrepreneur recognized as one of the 50 Most Influential Canadians in Crypto and Blockchain. A co-founder of Coinberry, he launched APX Lending in 2023 to provide compliant, crypto-backed lending solutions for retail and institutional borrowers, as well as financial institutions looking to integrate these services into their offerings.

In 2024, APX Lending emerged as a leader in Canada’s crypto-backed lending ecosystem. By collaborating with the Ontario Securities Commission (OSC), APX Lending helped establish a regulatory framework that ensures security and compliance for borrowers. This approach has positioned the company as a trusted partner for Canadians seeking liquidity solutions that leverage their crypto assets.

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