Bitcoin Hits $100K

The crypto market has been a true rollercoaster this year, with Bitcoin's price surging by 130%. More importantly, BTC surpassed the $100,000 mark for the first time in history at the beginning of December. While its price is currently hovering around this psychological level, market experts are confident that a stronger breakout and further increases are only a matter of time.

What drove Bitcoin and altcoins in 2024? First and foremost, the January debut of Bitcoin exchange-traded funds (ETFs), which proved to be a massive success. This attracted billions of institutional dollars into the crypto space, allowing it to venture into previously uncharted territory. The launch of Ethereum (ETH) ETFs also contributed, albeit to a lesser extent, while similar instruments for XRP and Solana are in the pipeline.

And Bitcoin is just the tip of the iceberg. Altcoins, including Ethereum, XRP, BNB, Solana, and Tron also surged significantly. However, the most wild rally was of meme tokens like Dogecoin, Shiba Inu, and even Fartcoin.

The presidential campaign played a crucial role too, with Donald Trump positioning himself as a true friend of crypto enthusiasts. The market believed in his stance, and since his November victory, prices have exploded with euphoria.

Trump quickly appointed billionaire Elon Musk, who actively (and generously) supported his campaign, to his team with the responsibility of cutting $2 trillion in government spending. And here's an interesting twist: Musk's new unit is called D.O.G.E., or Department of Government Efficiency.

After popularizing meme cryptocurrencies, it seems Musk is now trying to popularize meme government departments.

On MiCA You Route

The European Union implemented the Markets in Crypto-Assets Regulation (MiCA) for stablecoins in mid-2024, with the rest of the rules covering transactions set to take effect at the end of the year.

MiCA is the first major crypto-specific regulation introduced by any of the leading global regulators. The rules regarding stablecoins have also compelled crypto exchanges to revise their European services and operations.

But how?

Binance, Coinbase, and Bitstamp are just three of many that have delisted stablecoins not compliant with MiCA. This has also prompted stablecoin issuers like Circle to develop EU-compliant fiat-pegged cryptocurrencies; after all, such cryptocurrencies are vital for trading many altcoins. Crypto exchanges are also exploring the establishment of EU hubs to ensure uninterrupted European services following MiCA's full implementation.

And what about the national regulators? Many, including the authority in Cyprus, have started accepting licensing applications under MiCA, which will grant crypto companies passporting rights too.

Goodbye, Cyprus? Hello Dubai!

Cyprus, often considered the hub for CFDs, may be slowly losing its appeal. Some major players, like FXTM and HYCM, have left the island this year, whereas a few others are contemplating surrendering their Cyprus licenses.

CySEC fined brokers like IC Markets for non-compliance, and BDSwiss' license was suspended, raising questions about its future in Cyprus. Many experts have also pointed out that CySEC is overburdening brokers with stringent regulatory requirements.

However, the Mediterranean island has not entirely lost its charm, as others obtained CySEC licenses to initiate operations in Europe.

While Cyprus faces a potential exodus, Dubai is emerging as a hotspot for retail brokerage industry players. Many brokers have acquired licenses from the United Arab Emirates regulators and established local offices, predominantly in Dubai.

Some of the CFD brokers obtaining UAE licenses this year include Capital.com, Taurex, BDSwiss, ThinkMarkets, and AUS Global. Interestingly, brokers with a strong foothold in the Middle East, such as CAPEX.com, MultiBank, and CFI, have expanded their presence in Dubai by securing new licenses and opening offices.

The influx of brokers has also encouraged tech providers like Leverate and Tools for Brokers to set up a physical presence in Dubai.

Is London Still The King?

While London remains a hub for financial services, several factors have prompted brokers to reconsider their strategies in the country.

The FCA already imposes stringent licensing requirements on brokers. With the introduction of consumer duty, compliance costs have risen further, making operations more costly and complex, particularly for smaller brokers. Additionally, the UK has some of the strictest requirements globally to ensure that firms' products and services deliver clear consumer benefits.

Despite these challenges, most brokers operating in the UK view the tightening of processes related to onboarding and servicing customer accounts as an opportunity to differentiate themselves in a highly competitive market.

Interestingly, major players like XTB expanded their presence in the UK in 2024, while a few others entered the market for the first time. Meanwhile, many smaller brokers experienced notable growth in their UK operations. However, around 20% UK-regulated CFDs brokers are conducting “little or no activity,” as the FCA labeled them "halo" firms.

Unregulated Asia Moves into CFDs

The established CFD markets in “old” Europe and Australia have become increasingly saturated. No worries, they are not dead, yet. Over the past few years, significant changes have reshaped the global landscape, with Asia playing an increasingly prominent role—largely in unregulated environments.

In 2024, Asia's dominance became even more pronounced, accounting for 70.3% of all CFDs website traffic in Q3 2024. This growth continues to be driven primarily by India, though Thailand and Vietnam remain important contributors as well.

The “Heat Map” featured in several editions of our Intelligence Reports consistently highlights India as a “Hot Spot” on the global map. In Q4 2023, approximately 23.8% of global traffic to CFD brokers’ websites originated from India. By Q3 2024, this figure had surged to an impressive 55.5%, underscoring India’s growing influence in the global CFD market.

Revolut and the Superapps

In late Q3 2024, Revolut surprised everyone with a European market move by expanding its offering to include contracts for differences (CFDs). Currently, this service is only available to customers in the Czech Republic, Denmark, and Greece, with plans to expand to other European markets.

Revolut seems late to the party, as the CFD industry giants appear to be moving away from it, focusing instead on building “super apps” that combine multiple trading capabilities.

Take XTB as an example: they're focusing on passive products, savings options, and attracting a larger customer base. Don't be fooled by the new names though. Reports clearly show that while CFDs may not be a goldmine for client numbers, they remain a significant revenue generator.

Revolut's move might not be illogical after all.

CFD Trading Volumes Hitting Records

Although 2024 is technically not over yet and we have no final data for Q4, we can already say it was a record year for the FX/CFD industry.

When compared to Q1, in Q3 we saw a 32% growth in retail trading volumes. After several quarters of stagnation, numbers improved significantly. The industry not only broke above the $15 trillion monthly volume mark but also came close to the barrier of $20 trillion, excluding Japan.

Speaking of Japan, it made even bigger progress, with FX retail volumes growing by over 80% compared to Q1 of 2023. More to come in 2025?

Prop Trading Becomes a "Must-Have" for Brokers

Prop trading has been one of the hottest trends this year. Several major CFD players, including OANDA, Axi, Hantec Markets, and IC Markets, have introduced their own prop trading platforms.

Initially, many CFD brokers engaged with prop firms by offering ancillary services, such as grey-label platform licenses. While many brokers continue this, most have recognized the potential of directly offering prop trading services.

A survey also found that traders trust broker-backed prop platforms more than independent ones.

Meanwhile, some prop firms are transitioning towards broker status. For instance, FTMO, which generated $213 million in revenue last year, has launched a brokerage unit with high-profile industry hires. However, it has yet to secure a brokerage license.

Rise of the Platforms

One of the significant disruptions in the rapidly growing prop trading industry this year came from MetaQuotes, the developer of MetaTrader 4 and MetaTrader 5. The company banned the use of its trading platforms by prop firms catering to US residents, even when most services involved demo trading.

The crackdown occurred suddenly, disrupting the operations of many prop trading platforms and forcing them to seek MetaTrader alternatives.

This move has driven demand for other platforms, such as cTrader, DXtrade, Match-Trade, SiRiX, and others, which continue to support the onboarding of prop traders irrespective of their location.

MetaTrader's Exclusivity

MetaQuotes has restricted multiple brokers from integrating TradingView with MetaTrader platforms in the backend. The technology giant has clauses in the MetaTrader platforms' usage terms and conditions to prevent brokers from integrating with other third-party platforms.

MT4 and MT5 platforms dominate the CFD trading industry. However, many brokers are now integrating TradingView using non-MetaTrader platforms, allowing traders to execute trades directly from the charting environment.

There’s more: MetaQuotes has notified brokers that it will raise the licensing fees for MetaTrader platforms starting 1 January 2025.

There is no doubt about MetaTrader’s dominance, but can it be sustained for long?

Regulations on Prop Trading

The prop trading industry is thriving, but its growth—and the criticisms surrounding it—has caught the attention of regulators. The European Securities and Markets Authority has already conducted an initial review of these prop trading firms and discussed possible regulations for the industry. According to the Czech regulator, some of these platforms might fall under existing MiFID II rules.

The Australian financial markets regulator has also confirmed that it is monitoring the rise of prop trading firms.

There is more, but most of it is negative.

The regulator in Italy compared prop trading to “video games,” while the Belgian regulator issued a warning.

Regulations for prop trading firms appear imminent. It is only a question of when.

Meanwhile, My Forex Funds continues to fight its case with the CFTC in the US. However, the tables have turned in favour of the prop firm, which is seeking sanctions against the regulator after the lead attorney admitted to being “careless and sloppy” during the investigation.

AI Adoption in Fintech

While crypto markets experienced FOMO, the fintech space this year developed AI-MO: fear of missing out on artificial intelligence. Although everything nowadays must be AI-enabled (even your oven or fridge), the financial technology sector seems to genuinely understand how to leverage this trend.

In Asia alone, AI fintech firms are expected to attract up to $65 billion in value by 2025. This means that at least one in ten companies in the region will be a fully-fledged fintech powered by artificial intelligence. Banks continue to invest heavily in AI, with over $85 billion projected for generative AI in payments by 2030. Investors are increasingly using AI applications for portfolio management, with Assets Under Management projected to reach $16 trillion by 2025.

AI also plays a crucial role in more mundane aspects of fintech operations, including recruitment. In 70% of companies, it has helped with candidate sourcing and resume screening. So, AIntech, anyone?

Arnab Shome, Damian Chmiel, Sylwester Majewski, Paul Golden, Tareq Sikder and Jared Kirui participated in this article.

Bitcoin Hits $100K

The crypto market has been a true rollercoaster this year, with Bitcoin's price surging by 130%. More importantly, BTC surpassed the $100,000 mark for the first time in history at the beginning of December. While its price is currently hovering around this psychological level, market experts are confident that a stronger breakout and further increases are only a matter of time.

What drove Bitcoin and altcoins in 2024? First and foremost, the January debut of Bitcoin exchange-traded funds (ETFs), which proved to be a massive success. This attracted billions of institutional dollars into the crypto space, allowing it to venture into previously uncharted territory. The launch of Ethereum (ETH) ETFs also contributed, albeit to a lesser extent, while similar instruments for XRP and Solana are in the pipeline.

And Bitcoin is just the tip of the iceberg. Altcoins, including Ethereum, XRP, BNB, Solana, and Tron also surged significantly. However, the most wild rally was of meme tokens like Dogecoin, Shiba Inu, and even Fartcoin.

The presidential campaign played a crucial role too, with Donald Trump positioning himself as a true friend of crypto enthusiasts. The market believed in his stance, and since his November victory, prices have exploded with euphoria.

Trump quickly appointed billionaire Elon Musk, who actively (and generously) supported his campaign, to his team with the responsibility of cutting $2 trillion in government spending. And here's an interesting twist: Musk's new unit is called D.O.G.E., or Department of Government Efficiency.

After popularizing meme cryptocurrencies, it seems Musk is now trying to popularize meme government departments.

On MiCA You Route

The European Union implemented the Markets in Crypto-Assets Regulation (MiCA) for stablecoins in mid-2024, with the rest of the rules covering transactions set to take effect at the end of the year.

MiCA is the first major crypto-specific regulation introduced by any of the leading global regulators. The rules regarding stablecoins have also compelled crypto exchanges to revise their European services and operations.

But how?

Binance, Coinbase, and Bitstamp are just three of many that have delisted stablecoins not compliant with MiCA. This has also prompted stablecoin issuers like Circle to develop EU-compliant fiat-pegged cryptocurrencies; after all, such cryptocurrencies are vital for trading many altcoins. Crypto exchanges are also exploring the establishment of EU hubs to ensure uninterrupted European services following MiCA's full implementation.

And what about the national regulators? Many, including the authority in Cyprus, have started accepting licensing applications under MiCA, which will grant crypto companies passporting rights too.

Goodbye, Cyprus? Hello Dubai!

Cyprus, often considered the hub for CFDs, may be slowly losing its appeal. Some major players, like FXTM and HYCM, have left the island this year, whereas a few others are contemplating surrendering their Cyprus licenses.

CySEC fined brokers like IC Markets for non-compliance, and BDSwiss' license was suspended, raising questions about its future in Cyprus. Many experts have also pointed out that CySEC is overburdening brokers with stringent regulatory requirements.

However, the Mediterranean island has not entirely lost its charm, as others obtained CySEC licenses to initiate operations in Europe.

While Cyprus faces a potential exodus, Dubai is emerging as a hotspot for retail brokerage industry players. Many brokers have acquired licenses from the United Arab Emirates regulators and established local offices, predominantly in Dubai.

Some of the CFD brokers obtaining UAE licenses this year include Capital.com, Taurex, BDSwiss, ThinkMarkets, and AUS Global. Interestingly, brokers with a strong foothold in the Middle East, such as CAPEX.com, MultiBank, and CFI, have expanded their presence in Dubai by securing new licenses and opening offices.

The influx of brokers has also encouraged tech providers like Leverate and Tools for Brokers to set up a physical presence in Dubai.

Is London Still The King?

While London remains a hub for financial services, several factors have prompted brokers to reconsider their strategies in the country.

The FCA already imposes stringent licensing requirements on brokers. With the introduction of consumer duty, compliance costs have risen further, making operations more costly and complex, particularly for smaller brokers. Additionally, the UK has some of the strictest requirements globally to ensure that firms' products and services deliver clear consumer benefits.

Despite these challenges, most brokers operating in the UK view the tightening of processes related to onboarding and servicing customer accounts as an opportunity to differentiate themselves in a highly competitive market.

Interestingly, major players like XTB expanded their presence in the UK in 2024, while a few others entered the market for the first time. Meanwhile, many smaller brokers experienced notable growth in their UK operations. However, around 20% UK-regulated CFDs brokers are conducting “little or no activity,” as the FCA labeled them "halo" firms.

Unregulated Asia Moves into CFDs

The established CFD markets in “old” Europe and Australia have become increasingly saturated. No worries, they are not dead, yet. Over the past few years, significant changes have reshaped the global landscape, with Asia playing an increasingly prominent role—largely in unregulated environments.

In 2024, Asia's dominance became even more pronounced, accounting for 70.3% of all CFDs website traffic in Q3 2024. This growth continues to be driven primarily by India, though Thailand and Vietnam remain important contributors as well.

The “Heat Map” featured in several editions of our Intelligence Reports consistently highlights India as a “Hot Spot” on the global map. In Q4 2023, approximately 23.8% of global traffic to CFD brokers’ websites originated from India. By Q3 2024, this figure had surged to an impressive 55.5%, underscoring India’s growing influence in the global CFD market.

Revolut and the Superapps

In late Q3 2024, Revolut surprised everyone with a European market move by expanding its offering to include contracts for differences (CFDs). Currently, this service is only available to customers in the Czech Republic, Denmark, and Greece, with plans to expand to other European markets.

Revolut seems late to the party, as the CFD industry giants appear to be moving away from it, focusing instead on building “super apps” that combine multiple trading capabilities.

Take XTB as an example: they're focusing on passive products, savings options, and attracting a larger customer base. Don't be fooled by the new names though. Reports clearly show that while CFDs may not be a goldmine for client numbers, they remain a significant revenue generator.

Revolut's move might not be illogical after all.

CFD Trading Volumes Hitting Records

Although 2024 is technically not over yet and we have no final data for Q4, we can already say it was a record year for the FX/CFD industry.

When compared to Q1, in Q3 we saw a 32% growth in retail trading volumes. After several quarters of stagnation, numbers improved significantly. The industry not only broke above the $15 trillion monthly volume mark but also came close to the barrier of $20 trillion, excluding Japan.

Speaking of Japan, it made even bigger progress, with FX retail volumes growing by over 80% compared to Q1 of 2023. More to come in 2025?

Prop Trading Becomes a "Must-Have" for Brokers

Prop trading has been one of the hottest trends this year. Several major CFD players, including OANDA, Axi, Hantec Markets, and IC Markets, have introduced their own prop trading platforms.

Initially, many CFD brokers engaged with prop firms by offering ancillary services, such as grey-label platform licenses. While many brokers continue this, most have recognized the potential of directly offering prop trading services.

A survey also found that traders trust broker-backed prop platforms more than independent ones.

Meanwhile, some prop firms are transitioning towards broker status. For instance, FTMO, which generated $213 million in revenue last year, has launched a brokerage unit with high-profile industry hires. However, it has yet to secure a brokerage license.

Rise of the Platforms

One of the significant disruptions in the rapidly growing prop trading industry this year came from MetaQuotes, the developer of MetaTrader 4 and MetaTrader 5. The company banned the use of its trading platforms by prop firms catering to US residents, even when most services involved demo trading.

The crackdown occurred suddenly, disrupting the operations of many prop trading platforms and forcing them to seek MetaTrader alternatives.

This move has driven demand for other platforms, such as cTrader, DXtrade, Match-Trade, SiRiX, and others, which continue to support the onboarding of prop traders irrespective of their location.

MetaTrader's Exclusivity

MetaQuotes has restricted multiple brokers from integrating TradingView with MetaTrader platforms in the backend. The technology giant has clauses in the MetaTrader platforms' usage terms and conditions to prevent brokers from integrating with other third-party platforms.

MT4 and MT5 platforms dominate the CFD trading industry. However, many brokers are now integrating TradingView using non-MetaTrader platforms, allowing traders to execute trades directly from the charting environment.

There’s more: MetaQuotes has notified brokers that it will raise the licensing fees for MetaTrader platforms starting 1 January 2025.

There is no doubt about MetaTrader’s dominance, but can it be sustained for long?

Regulations on Prop Trading

The prop trading industry is thriving, but its growth—and the criticisms surrounding it—has caught the attention of regulators. The European Securities and Markets Authority has already conducted an initial review of these prop trading firms and discussed possible regulations for the industry. According to the Czech regulator, some of these platforms might fall under existing MiFID II rules.

The Australian financial markets regulator has also confirmed that it is monitoring the rise of prop trading firms.

There is more, but most of it is negative.

The regulator in Italy compared prop trading to “video games,” while the Belgian regulator issued a warning.

Regulations for prop trading firms appear imminent. It is only a question of when.

Meanwhile, My Forex Funds continues to fight its case with the CFTC in the US. However, the tables have turned in favour of the prop firm, which is seeking sanctions against the regulator after the lead attorney admitted to being “careless and sloppy” during the investigation.

AI Adoption in Fintech

While crypto markets experienced FOMO, the fintech space this year developed AI-MO: fear of missing out on artificial intelligence. Although everything nowadays must be AI-enabled (even your oven or fridge), the financial technology sector seems to genuinely understand how to leverage this trend.

In Asia alone, AI fintech firms are expected to attract up to $65 billion in value by 2025. This means that at least one in ten companies in the region will be a fully-fledged fintech powered by artificial intelligence. Banks continue to invest heavily in AI, with over $85 billion projected for generative AI in payments by 2030. Investors are increasingly using AI applications for portfolio management, with Assets Under Management projected to reach $16 trillion by 2025.

AI also plays a crucial role in more mundane aspects of fintech operations, including recruitment. In 70% of companies, it has helped with candidate sourcing and resume screening. So, AIntech, anyone?

Arnab Shome, Damian Chmiel, Sylwester Majewski, Paul Golden, Tareq Sikder and Jared Kirui participated in this article.