Bitcoin doubled in 2024 supported by a US markets regulator decision to allow exchange funds linked to its spot price, as well as optimism that Donald Trump's return to the White House would ease regulatory roadblocks.
The global largest and most popular cryptocurrency reached $100,000 earlier in the month, marking a milestone that's had sparks flying throughout some of the more fervent backers of the erstwhile nascent asset class.
A more than 120% surge in bitcoin this year and a nearly 50% jump in ether, the second-largest cryptocurrency, have propelled the sector’s market value to roughly $3.5 trillion, according to CoinGecko data.
More gains are in store for 2025, according to analysts.
We continue to believe $100,000 is just an interim step. We anticipate that Bitcoin will print a cycle peak of $200,000 by the end of 2025," analysts at brokerage Bernstein wrote in a client note earlier this month.
MicroStrategy, a software company that has become the world's largest corporate holder of bitcoin, has seen its shares jump nearly fivefold in 2024.
The stock, which recently joined the benchmark Nasdaq-100 index, is now considered a proxy for bitcoin. Its movement closely follows sentiment around the digital asset. Several smaller companies are following its playbook and allocating portions of their cash to bitcoin.
We expect bitcoin to emerge as the new-age premier 'store of value' asset eventually replacing gold over the next decade and becoming a permanent part of institutional multi-asset allocation and a standard for corporate treasury management," the Bernstein note said.
Much of the optimism began in January when the U.S. 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 finance heavyweights including BlackRock and Fidelity launched the products.
Later in the year, the victory of Trump, who promised to make the United States the "crypto capital of the planet," further strengthened the position of the industry. Crypto advocates donated millions during the election, hoping to elect candidates that 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, several other crypto miners have reeled under shrinking margins due to higher energy and hardware costs and have thus missed the year's rally.
Shares of Riot Platforms, Marathon Digital and Bit Digital lost between 26% and 32% this year.
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