Author: Manya Saini
(Reuters) – Bitcoin more than doubled in 2024, boosted by U.S. markets regulators’ approval of exchange-traded funds tied to its spot price and optimism about easing regulatory hurdles with Donald Trump poised to return to the White House.
The world’s largest and best-known cryptocurrency hit $100,000 earlier this month, a milestone that ignited ‘animal spirits’ among supporters of the once fledgling asset class.
A more than 120% rise in bitcoin this year and a nearly 50% jump in ether, the second-largest cryptocurrency, have lifted the sector’s market value to roughly $3.5 trillion, according to CoinGeck.
According to analysts, bigger gains are expected in 2025.
“We remain convinced that $100,000 is not the final turning point. We expect Bitcoin to reach a cycle high of $200,000 in late 2025,” analysts at brokerage Bernstein wrote in a client note earlier this month.
MicroStrategy, the software company that has become the world’s largest corporate holder of bitcoin, has seen its stock jump nearly fivefold in 2024.
The stock, which recently joined the benchmark Nasdaq-100 index, is now considered a substitute for bitcoin, and its movement is closely linked to sentiment towards the digital asset. Several smaller companies are following his strategy and allocating portions of their cash to bitcoin.
“We expect bitcoin to emerge as the main ‘store of value’ asset of the new age that will eventually replace gold over the next decade and become a permanent part of institutional multi-asset allocation and the standard for corporate treasury management,” Bernstein said in a note.
Much of the optimism began in January when the US Securities and Exchange Commission approved the first ETFs to track the spot price of bitcoin, marking a watershed moment for the broader crypto industry.
The move gave the sector institutional legitimacy and improved its mainstream appeal as traditional financial heavyweights including BlackRock and Fidelity launched products.
The victory of Trump, who promised to make the United States the “crypto capital of the planet”, further strengthened the industry’s position later this year. Cryptocurrency advocates donated millions during the election, hoping to elect candidates who favored the sector.
Most crypto stocks also benefited from industry-wide gains. The big winners in 2024 are MicroStrategy, crypto exchange Coinbase and bitcoin miner Hut 8
On the other hand, several other crypto miners shuddered as margins fell due to higher energy and hardware costs, missing this year’s rally.
