The Year in Bitcoin: From ETFs to All-Time Highs – Decrypt

This year was a different year than usual. Bitcoinfrom new technological advances and historic milestones to finding a place on Wall Street and being used as a political football in the US election.

Let's take a look back at the year for the world's largest cryptocurrency.

Bitcoin ETF waits 10 years

For a decade, the Securities and Exchange Commission has been saying “no” to top asset managers who want to offer Bitcoin exchange-traded funds (Bitcoin ETFs, which were once hard to obtain) to U.S. clients. However, the mood changed when BlackRock, the world's largest asset management company, filed with the SEC to establish its own Bitcoin ETF in June 2023.

ETFs are investment vehicles that allow buyers to gain exposure to assets without having to purchase and store the assets directly. For example, gold ETFs have long been popular and offer investors the convenience of investing in gold without the hassle of finding a safe place to store physical bars or coins.

But the SEC has been wary of allowing such a move for Bitcoin, repeatedly rejecting applications on the grounds that the cryptocurrency market can be easily manipulated.

Industry analysts believed that BlackRock's intervention would ultimately give regulators the green light. And it turns out it was. On January 10, the SEC approved 10 Bitcoin ETFs will be traded the next day. The U.S. market finally has a way for retail investors to put small amounts of money into Bitcoin without having to deal with crypto exchanges, wallets, or seed phrases. It was huge and had a bigger impact than even the most optimistic Bitcoin supporters could have imagined.

All-time high

Once trading began, no one, not even those whose job is to analyze the ETF niche, expected such a strong start. Money quickly hit the funds. Investors previously locked out of the world of cryptocurrency investing could suddenly be buying stocks on stock exchanges that track the price of Bitcoin.

The asset hit an all-time high of just over $73,000 in March, according to CoinGecko data.

But it wasn't easy. A number of macroeconomic factors weighed heavily on Bitcoin throughout the year, not to mention government confiscations and large-scale crypto movements.

Despite hitting a new all-time high in March, the following months were rocky for Bitcoin as geopolitical risks, particularly those in the Middle East, drove investors away from risky assets.

Bitcoin briefly struggled to break above $60,000 due to rising tensions between Iran and Israel and missile attacks.

The German government sold off Hundreds of millions of dollars in Bitcoin were seized in June.

And in September, it finally happened. The Federal Reserve cut interest rates by 50 basis points.This is the first rate cut since the central bank aggressively raised interest rates in 2022. The central bank had been raising interest rates to curb post-pandemic inflation.

When interest rates rise, investors typically take a “risk-off” approach, exiting riskier assets such as stocks and cryptocurrencies and fleeing to the relative safety of the US dollar.

September cut and then chop The asset became more attractive to investors again in November, leading to a surge in prices. The resurgence of “risk-on” trading has helped crypto assets, not just Bitcoin, reach new highs.

The following month, Bitcoin did what crypto hopefuls had been predicting for years. $100,000 mark Following Donald Trump's re-election as US president, investors are hoping for a more relaxed regulatory environment for digital assets, which will be released in early December for the first time in the company's 15-year history.

institutions and politics

There were two main reasons for the rise in Bitcoin prices: institutional and political.

On Nov. 5, Trump surprised onlookers by summarizing the Electoral College and popular vote. The Republican candidate campaigned as a potential leader of a Bitcoin-friendly America.

President Trump: “I have a plan for the United States to become the crypto capital of the planet.'' said At the Bitcoin 2024 conference in Nashville in July, he pledged to make the country a “Bitcoin superpower” if elected.

Analysts and industry watchers expected Trump's victory to strengthen major digital assets. Their predictions proved accurate. Immediately after he was announced as the next president of the United States, the price of Bitcoin skyrocketed.

Less than a month after his win, Bitcoin reached $103,679.

Assets continue to rise, at least in theory, as America now has the most pro-Congress crypto holdings in history, including Vice President-elect J.D. Vance, a digital asset supporter who owns large amounts of Bitcoin. There are favorable conditions for this.

Robert F. Kennedy Jr., the next U.S. Secretary of Health and Human Services, spoken Discussing how Bitcoin should back the dollar, National Security Adviser Michael Walz voted in favor of the virtual currency bill.

Many other Republicans and Trump supporters also support pro-cryptocurrency policies. All eyes are on it now. Strategic Bitcoin Reservethe US government plans to keep billions worth of Bitcoin on its balance sheet for years to come, It will likely be approved when President Trump takes office in January.

The approval of spot ETFs opens the door to traditional financial giants such as: goldman sachs and morgan stanley Invest in cryptocurrencies via vehicle.

In the words of MicroStrategy co-founder Michael Saylor, 2024 was “year zero of institutional adoption.”

Businesses buy Bitcoin

Speaking of Saylor, the Bitcoin evangelist's company aggressively bought up Bitcoin in 2024, accelerating its purchases towards the end of the year.

The software company's stock price soared to an all-time high, and its co-founder continued to beat the Bitcoin drum and speak widely about how cryptocurrencies could save businesses.

The billionaire, whose company holds 444,462 Bitcoins (worth about $42 billion at the time of writing), even shared his Bitcoin adoption strategy with the Microsoft board. The company decided not to purchase Bitcoin, although it admitted that it had thought about the issue.

However, other small and medium-sized enterprises such as Japan, metaplanet and US listed companies, etc. semler scientific and cosmos health Purchased assets as an inflation hedge.

half-life has occurred

But it wasn’t just adoption by ETFs and institutional investors that brought Bitcoin into the spotlight in 2024. The timing coincided with one of the most anticipated events for Bitcoiners this year, the Bitcoin halving.

This event is built into Bitcoin's code, takes place every four years, and is intended to reduce Bitcoin's inflation rate. Each halving reduces the reward for successfully mining a Bitcoin block by half. This means fewer Bitcoins enter the system. This will continue to happen until mining rewards are completely phased out and Bitcoin reaches a fixed supply of 21 million coins.

However, this half-life was different from previous half-lives. investor focused on that More than ever. why? It's time again. The increased adoption and success of Bitcoin ETFs has led to the introduction of more Bitcoin ETFs. People expect that the event will increase the value of their assets. After all, if supply decreases and demand increases, prices should rise.

And while the event was a little less impressive, for the first time the coin hit an all-time high even before the April halving.

Runes were a thing

This half-life also brought about something else. It is a short-lived enthusiasm for new technological advancements on the Bitcoin network. runes.

Casey Rodarmor, the man behind the Ordinals epitaph launched last year, has created a new standard for creating tokens on the blockchain called Rune. Rune Protocol was launched on the same day as the Bitcoin halving, and the dog-themed meme coin gained traction on the network and proved popular for a while. value is skyrocketing.

However, some people in the community were unhappy with what Runemania had done to the largest and oldest crypto network: transaction fees. rose sharply Whenever a series of activities occur on the blockchain to mint new tokens.

Still, even if it's just an annoying fad for some people, this announcement shows that Bitcoin offers more use cases than just owning it and hoping the numbers will go up. I proved that I can do it.

Edited by Sebastian Sinclair