Bitcoin makes historic leap from $44,167 to record numbers in 2024!
As 2024 draws to a close, the cryptocurrency market stands out as one of the most dynamic financial markets, having seen a dramatic transformation from a harsh winter in 2022 and 2023 to a remarkable boom. The total market cap of these currencies has surpassed the $3 trillion mark this year, reinforcing the role of these digital assets in the financial system. With the major recovery of the leading currency “Bitcoin” reaching new historical levels, it has become necessary to review the most prominent developments that have reshaped the market, in addition to future expectations.
- Bitcoin crosses $100,000: In a remarkable historical achievement, Bitcoin broke the $100,000 barrier in November 2024, marking a milestone not only for cryptocurrencies but for the global economy as a whole. After first breaking the $90,000 barrier on November 14, it rose to $94,800 by November 20, before jumping to $99,655.50 on November 22. At the end of the month, the price of Bitcoin reached $103,449.70, before reaching its all-time high of more than $106,000 on December 16.
This significant breakthrough is seen as a strong incentive for institutions, companies and even countries to take Bitcoin and cryptocurrencies more seriously. Compared to January 2024, when Bitcoin was worth $44,167, the currency has more than doubled in value.
- Approval of Bitcoin Exchange Traded Funds (ETF):
The cryptocurrency market witnessed a qualitative shift in January 2024 with the US Securities and Exchange Commission approving 12 spot Bitcoin ETFs, a historic decision that reflects a major step towards strengthening regulation and increasing confidence in the market.
This shift has helped attract institutional investment in a legal and regulated manner, strengthening Bitcoin’s position as a reliable financial asset that can be included in major institutional investment portfolios. On December 5, 2024, Bitcoin ETFs on the US stock exchange recorded an exceptional trading volume of $7.1 billion. BlackRock’s Bitcoin ETF has also become the fastest-growing investment product of its kind, raising $13.5 billion in assets under management in just three months. Chris Kuiper, director of research at Fidelity Digital Assets, noted that Bitcoin has returned more than 150 percent in 2023, and has added another 75 percent in returns so far in 2024.
- The last halving of Bitcoin:
In April 2024, Bitcoin experienced a halving event that reduced the mining reward from 6.25 to 3.125 bitcoins per block, a pivotal event in the cryptocurrency’s trajectory. While these events typically result in significant price increases due to the supply reduction, the market did not experience the immediate spike expected. This disparity in response reflects the maturity of the market and growing investor understanding of the event, suggesting that the effects of the halving are becoming more gradual and less immediate compared to previous years.
- Trump's impact on the Bitcoin market:
Bitcoin has seen a significant surge since Donald Trump won the US presidential election, with the cryptocurrency community counting on his new administration to provide a regulatory environment that will foster the sector’s growth. At the Bitcoin conference in Nashville in July 2024, Trump praised the idea of creating a “Federal Reserve” for Bitcoin, stressed the importance of attracting mining operations to America, and pledged to make it the “capital of cryptocurrencies.” He also launched the “World Liberty Financial” project in cooperation with his family to trade cryptocurrencies. For his part, the president-elect’s son, Eric Trump, executive vice president of the Trump Organization, expressed his optimism that the United States could become a global leader in cryptocurrencies, by setting some thoughtful regulatory guidelines. He also expressed his strong support for decentralized finance (DeFi) operations, noting that the traditional banking system has become outdated and that cryptocurrencies are ready to surpass it and achieve a qualitative leap in this field.
On December 5, 2024, Trump announced that he would fulfill his campaign promise and be “Crypto President,” appointing David Sachs, a former PayPal executive and crypto advocate, as “White House Advisor on Cryptocurrency and Artificial Intelligence,” to lead crypto policy and work on a legal framework that provides clarity for the crypto industry.
He also announced that he would appoint cryptocurrency advocate Paul Atkins to lead the SEC, who has voiced support for crypto innovation as a way to promote competition in the financial services sector and has helped crypto companies deal with regulators through his consulting firm, Pathomac Global Partners.
Bitcoin between economic and geopolitical challenges:
Amid global economic volatility and the successive interest rate cuts by the Federal Reserve after a tight monetary tightening cycle in 2022, cryptocurrencies, led by Bitcoin, have emerged as a safe haven against traditional financial risks. Interest rate cuts in 2024 have affected the price behavior of cryptocurrencies, as these policies reflect the economic distress that may prompt investors to avoid high-risk assets. However, Bitcoin still retains its appeal as a decentralized monetary network and an alternative asset to hedge against systemic financial weakness. As the global economy slows, its role as an alternative asset increases amid expectations of a turbulent economic period that may be both pivotal and influential. Increased liquidity in the financial system is likely to lead to a flow of money into digital assets, which may significantly boost demand for Bitcoin.
On the geopolitical front, crises in the Middle East and global tensions in 2025 are expected to impact Bitcoin prices, as the cryptocurrency has historically shown gains after major crises such as the US-China trade dispute in 2019 and Russia’s invasion of Ukraine. Bitcoin’s decentralized nature and limited supply make it an effective hedge, especially in light of the devaluation of traditional currencies. However, large volatility in Bitcoin prices remains, which calls for caution from investors when dealing with these assets in light of economic and geopolitical instability.
2025... Regulatory Framework and Arms Race
A pro-crypto regulatory shift, coupled with the creation of a strategic reserve for Bitcoin, is expected to help the crypto market rebound in 2025. After the market turmoil of 2022, investors are still looking for a comprehensive regulatory framework that promotes stability. The shift in the role of the Securities and Exchange Commission to the Commodity Futures Trading Commission (CFTC) could add to the market’s clarity.
In the final months of the US presidential campaign, there has been a surprising amount of discussion about cryptocurrencies emerging as a new national strategic priority. In this context, some cryptocurrency advocates have suggested that a “Bitcoin arms race” could emerge, in which sovereign governments around the world might begin making massive purchases. In the US, this buying race would likely begin by creating a strategic reserve that would allow it to buy 1 million bitcoins over the next five years. Other countries would likely be forced to follow suit. This possibility has raised the intriguing question of whether China might be forced to reverse its ban on cryptocurrencies that was imposed in late 2021. If China decides to dive into the Bitcoin market and starts accumulating them as it has been doing with its gold reserves, the market could see an unprecedented surge in price. Brazil and Russia are also currently considering using Bitcoin as a strategic reserve, reflecting the growing role that cryptocurrencies are playing in the global economy.
Bright prospects
The cryptocurrency market, led by Bitcoin, has matured and transformed in 2024, and this momentum is expected to continue in 2025, driven by anticipated regulatory developments and increased interest from governments and institutions. Nigel Green, CEO of deVere Group, one of the world’s largest financial advisory firms, expects Bitcoin to rise to $120,000 by the end of the first quarter of 2025, despite a potential temporary dip due to profit-fixing by some investors. Standard Chartered, for its part, raised its price target for Bitcoin by the end of 2025 to $200,000.
With these bright expectations, the question remains: Will the global economy witness a new financial revolution led by cryptocurrencies, subject to regulatory developments, broad acceptance by governments and major institutions, as well as the ability of financial technology to overcome the economic and geopolitical challenges that may arise?
