Bitcoin has more than doubled in value in 2024, reaching new heights following the approval of exchange-traded funds (ETFs) tied to its spot price by U.S. markets regulators and growing optimism over regulatory changes with Donald Trump set to return to the White House. Earlier this month, the cryptocurrency hit a significant milestone, surpassing $100,000, sparking renewed excitement among its supporters.
The cryptocurrency sector has experienced substantial growth this year, with Bitcoin surging more than 120% and Ether, the second-largest cryptocurrency, rising nearly 50%. This surge has propelled the market’s overall value to approximately $3.5 trillion, according to data from CoinGecko. Analysts predict that the momentum will continue into 2025, with some projecting Bitcoin could reach $200,000 by late next year.
MicroStrategy, a software firm that has become the largest corporate holder of Bitcoin, has seen its stock price soar nearly five-fold in 2024. The company’s stock is now considered a proxy for Bitcoin, with its price movements closely linked to the sentiment surrounding the digital asset. Other smaller companies are following suit, allocating portions of their cash to Bitcoin.
In a client note, analysts at brokerage firm Bernstein stated that they expect Bitcoin to evolve into a premier “store of value” asset, potentially replacing gold within the next decade and becoming a staple of institutional multi-asset allocation and corporate treasury management.
The surge in Bitcoin’s value began in January when the U.S. Securities and Exchange Commission approved the first ETFs tracking Bitcoin’s spot price. This approval marked a significant turning point for the cryptocurrency industry, giving it institutional legitimacy and broadening its appeal to mainstream investors. Major finance firms such as BlackRock and Fidelity launched Bitcoin-related ETFs, further strengthening the asset’s position.
Additionally, the election victory of Donald Trump, who has pledged to make the U.S. the “crypto capital of the planet,” boosted optimism in the sector. Trump’s pro-crypto stance attracted substantial donations from crypto advocates who hoped to elect candidates favorable to the industry.
The 2024 rally also benefited various crypto-related stocks, with winners including MicroStrategy, crypto exchange Coinbase, and Bitcoin miner Hut 8. However, some crypto miners faced challenges due to shrinking profit margins caused by rising energy and hardware costs, leading to significant losses. Riot Platforms, Marathon Digital, and Bit Digital saw declines of 26% to 32% in their stock prices this year.