by Manya Saini
(Reuters) – Bitcoin more than doubled in 2024 led by the U.S. markets regulator’s approval of exchange-traded funds linked to its spot price, and optimism about the easing of barriers regulators with Donald Trump returning 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-nascent asset class.
A rise of more than 120% in bitcoin this year and a jump of almost 50% in ether, the second largest cryptocurrency, have pushed the market value of the sector to about $3.5 trillion , according to CoinGecko data.
More gains are in store for 2025, according to analysts.
“We are convinced that $100,000 is not the last milestone. We expect Bitcoin to hit a cycle of $200,000 at the end of 2025,” analysts at the Bernstein brokerage wrote in a client note before the month
MicroStrategy, a software company that has become the world’s largest corporate holder of bitcoin, has seen its shares rise nearly fivefold by 2024.
The stock, which joined the benchmark Nasdaq-100 index recently, is now seen as a proxy for bitcoin, with its movement closely linked to sentiment towards the digital asset. Many smaller companies are following his playbook and allocating some of their money to bitcoin.
“We expect bitcoin to emerge as the new-age ‘store of value’ asset that will eventually replace gold in the next decade and become a permanent part of multi-asset institutional allocation and a standard for corporate treasury management,” the Bernstein note said.
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 an explosive 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 position of the industry later this year. Crypto advocates donated millions during the election, hoping to elect candidates who favor the sector.
Most crypto stocks also benefited from the industry-wide rally. The big winners of 2024 are MicroStrategy, crypto exchange Coinbase and bitcoin miner Hut 8
On the other hand, many other crypto miners suffered under declining margins due to higher energy and hardware costs, missing the year’s performance.
https://media.zenfs.com/en/reuters-finance.com/53e5c8a19dc82f039969b774eb1f0e76
2024-12-31 18:20:00
