The Year in Ethereum: Lawsuits, ETFs, Technical Upgrades and Trump

For Ethereum2024 was the year in which both a lot and not much happened, it seemed.

There was substantial innovation, but those who simply wanted to make money investing in Ethereum’s native coin ETH are a bit disappointed – if the atmosphere is on Crypto Twitter (also known as X) are all you can do.

Upgrades like Dencun made it cheaper to get things done on the network, and newly elected President Donald Trump even threw his support behind a project built on Ethereum. But there was also a crackdown from regulators, leading many to believe the SEC would hit the ecosystem hard.

The surprising approval of place ETH Exchange Traded Funds turned things around, but did not lead to an explosion in the price of the asset, as was the case with its price Bitcoin counterparts.

Yet it was still an exciting – and notable – year for the blockchain behind the second largest coin in crypto. Here’s a look back at how it all went down.

Regular performance

In April, rumors started to swirl that the SEC could come after Ethereum altogether after the Ethereum Foundation announced it was being investigated by a state authority.

Then, Wall Street’s top regulator and one of the biggest names in the Ethereum world, software giant Consensys (disclosure: one of 22 investors in Declutter), went to battle.

It started when the SEC hit the company with a notice from Wells, warning of an impending lawsuit over securities law violations involving its popular Ethereum wallet, MetaMask. Consensys snapped back with one preventive suit against the SEC.

The company claimed that the agency had secretly considered ETH a security for more than a year, claiming that the regulator’s actions would “punish Consensys for accepting and trading in reliance on years of government assurance that ETH is not a security .”

Then the SEC Consensys sued for alleged involvement in the unregistered offering and sale of securities through its MetaMask Swaps and Staking services.

The Consensys lawsuit was thrown out by a judge in September. Trump winning has been both good and bad for the company: the SEC will too have a new, pro-crypto chairman if Trump’s pick, Paul Atkins, is confirmedbut not before Consensys had to cut its workforce by 20% in October. The company cited aggressive regulation and lawsuits as part of the reason.

ETFs make an impact

After the expected approval and huge debut trading months of the spot Bitcoin ETFs, industry observers didn’t think Ethereum would get the same green light — at least not right away — because the regulator wasn’t clear on whether the asset was a security or product.

But in a surprising move, the SEC gave it a thumbs-up. And two months after the initial approvals, spot ETFs began trading in July. But desperation seemed to set in when the ETH price failed to rise.

The adoption of the Bitcoin ETFs had pushed the price of Bitcoin to a new all-time high from an all-time high. ETH hasn’t been so lucky: at the time of writing, it still has a significant gap to close until it breaks its 2021 record high of $4,878.

Even if Ethereum’s price didn’t skyrocket, the ETF’s approval yielded one major victory: the SEC no longer called ETH a securit.

Despite earlier proverb in 2018 that was the asset not a security firm, outgoing SEC Chairman Gary Gensler refused for years to answer questions about where the coin was located — and hit crypto company after crypto company with lawsuits for allegedly selling unregistered securities.

But the approval of the ETFs showed that the watchdog essentially agreed that the assets were sufficiently decentralized not to be securities. This came with Wall Street’s recognition of ETH and its blockchain as an asset class – even as traditional finance has was having a hard time delve into the value proposition of Ethereum.

It helped that the really big names, like BlackRock boss Larry Fink, generated some momentum. BlackRock’s CEO started the year well proverb that he saw “value” in an Ethereum ETF, and that it was a stepping stone to “tokenization.”

The asset manager arrived in March launched “BUIDL” – a tokenized fund running on Ethereum – and later joined the fray with its own spot ETF.

Even Trump is building on ETH

President-elect Donald Trump campaigned hard ahead of his victory to make America the “crypto capital of the planet.”

As part of his digital asset-focused agenda, he helped launch a project running on… you guessed it, Ethereum.

First teased in August by his son Eric, World Liberty Financial is a decentralized finance project. Decentralized finance – or DeFi – is the cryptosphere that aims to make taking out a loan automatic and easy via blockchain-based protocols.

Most DeFi projects are built on Ethereum, so it’s not a huge surprise that the Trump team chose the project, but still: it was big news for the community. WLF will offer crypto services for borrowing and lending, the team behind the project said in an exclusive interview with Decode sister company, Rug Radio.

The project took off and had some success slow token launch– only open to accredited investors – but it is still in its infancy. Sources tell Declutter that Team Trump also has plans to launch a native stablecoin, even though it is indeed a crowded market.

Layer 2s are taking over

On the technical side, Ethereum also became cheaper – much cheaper. The network Dencun upgrade has lowered transaction costs on its layer 2 networks. Such networks enable faster and cheaper transactions than on the mainnet, and Dencun’s addition of “proto-dankharding” technology has further reduced costs for users.

That’s the good news. On the other hand, the increasing use of L2’s value has been pulling away from layer-1 Ethereum, which some in the crypto space believe is responsible for Ethereum’s declining price performance this year.

In fact, VanEck’s Head of Digital Assets Research Matthew Sigel said in October that unless Ethereum gets a “model change,” he expects ETH’s price to reach just $7,300 in 2030 – as opposed to $22,000 according to previous forecasts.

Layer-2 networks extract “more value from Ethereum” than previously expected, he said. Fortunately, Ethereum founder Vitalik Buterin and others in the space are considering changes such as fee-sharing models that could bring more balance to the ecosystem so that L2s don’t become overly extractive.

Edited by Stacy Elliott and Andrew Hayward