Are you ready to embrace the next wave of BTC?
Author of the article, source: Meta-Luban.
A shining year, Bitcoin welcomes a historic moment.
The year 2024 is destined to be recorded in the history of the cryptocurrency circle, with Bitcoin's market capitalization exceeding $1.9 trillion, ranking seventh among the world's most valuable assets and companies.
Looking back on this year, Bitcoin not only broke through several historic thresholds but also solidified a more important position in the capital markets and the minds of global investors. Whether it is the approval of spot ETFs, the policy dividends brought by Trump's re-election, or the price breaking the $100,000 mark, Bitcoin has completed a transformation from a safe-haven asset to a core global investment target this year.
Milestone event review.
01/10 Bitcoin spot ETF approved, institutional frenzy begins.
04/19 Fourth halving, scarcity further enhanced.
04/30 Hong Kong launches Asia's first spot Bitcoin ETF.
07/13 The Trump assassination attempt shakes the market.
09/18 Interest rate cut cycle begins, funds flow into crypto assets.
11/06 Trump successfully re-elected as President of the United States, market confidence surges.
11/19 Bitcoin spot ETF options launched, tool ecosystem further improved.
12/05 Trump nominates Paul Atkins as SEC chairman, crypto-friendly signals emerge.
12/06 Announces David Sacks as the first 'AI and cryptocurrency czar'.
12/12 Trump promises significant actions on cryptocurrencies.
Bitcoin breaks $100,000: a capital feast.
In 2024, Bitcoin's annual gain reached 180%, not only setting a new historical high but also triggering a fervent pursuit in the capital markets. The month with the strongest performance was February, with a gain of 52%. In November, after Trump's election victory, Bitcoin broke through the $100,000 mark, becoming the brightest star in the financial market. Data analysis shows that since Trump's victory, Bitcoin's price has risen nearly 60%. This series of major events not only laid the foundation for the shining moment of Bitcoin in 2024 but also established a solid basis for future growth.
Cryptocurrency concept stocks explode.
Bitcoin's strong performance has also driven a collective surge in cryptocurrency concept stocks.
From the performance of cryptocurrency concept stocks in the U.S. stock market this year, the 'big holder' $MicroStrategy (MSTR.US)$ stock price soared over 520%, becoming the biggest winner in the cryptocurrency bull market. Bitcoin mining companies $TeraWulf (WULF.US)$ surged 213%, $Bitdeer Technologies (BTDR.US)$ rose over 116%, $Hut 8 (HUT.US)$ increased over 100%, $IREN Ltd (IREN.US)$ rose over 87%, while cryptocurrency exchange giant $Coinbase (COIN.US)$ climbed nearly 80%.
MicroStrategy, with its bold Bitcoin reserve strategy, has seen its stock price soar amid Bitcoin's rise. The Bitcoin spot ETF has also welcomed a moment of explosive growth. As of November 30, 2024, 45 funds held 1,266,862 Bitcoins. In less than a year since its launch, the ETF accounted for 6% of the total Bitcoin supply, surpassing Satoshi's holdings. According to data from Farside Investors, as of December 21, 2024, the U.S. Bitcoin spot ETF has seen cumulative net inflows exceeding $36 billion since its launch.
It is worth noting that the asset size of the Bitcoin spot ETF launched by BlackRock surpassed its gold ETF, iShares Gold ETF (IAU), in October this year, achieving this in just 10 months. The iShares Gold ETF (IAU) was launched by BlackRock in January 2005.
Throughout the year, the investment landscape has been boosted by Bitcoin's fourth halving scarcity, the influx of institutional funds, macroeconomic factors, and improvements in the global policy environment. The strong performance in 2024 has raised investors' expectations for the future. Bitcoin's value is not only reflected in its price increase but also in its challenge to the traditional financial system and its shaping of the future financial world.
In 2024, Bitcoin's performance surpassed traditional investments such as stocks and gold.
Why has the market surged significantly? Three driving factors.
1: Supply Side: Bitcoin Halving Effect
From the supply side, historical halving events often lead to market rallies approximately six months later. The supply contraction effect brought by the halving is gradually becoming evident, pushing the market into a new rising cycle in the latter half of 2024. This scarcity of supply further attracts institutional investors and long-term holders (HODLers) to continue increasing their holdings, injecting strong upward momentum into the market.
2: Demand Side: Trump's re-election and favorable policies.
Trump's victory is seen as one of the biggest driving forces behind the rise in Bitcoin prices. He repeatedly stated during his campaign that the innovative spirit of cryptocurrencies aligns with America's core values. Most of his cabinet members are crypto-friendly, successfully forming a 'crypto-friendly' team that greatly boosted market confidence. The compliance process—the forthcoming (FIT21 Act) and (DAMS Act) in the U.S.—is driving Bitcoin and other crypto assets to gradually emerge from the 'gray zone'. This policy change provides global investors with new asset allocation options and brings more robust long-term development possibilities for the digital currency industry.
Exploration of strategic Bitcoin reserves. Since the U.S. election, calls for establishing a national strategic Bitcoin reserve have been growing. This was also one of the campaign promises made by President Trump to be friendly to cryptocurrencies. Several states in the U.S. have begun exploring the possibility of establishing strategic Bitcoin reserves. For example, Texas proposed legislation on 12/12 to establish a strategic Bitcoin reserve by accepting Bitcoin as a form of tax payment, fees, and donations, and holding these Bitcoins for at least five years. The Texas proposal may pave the way for a national strategic Bitcoin reserve plan in the U.S. Other states are also following suit. In addition, the Federal Reserve's interest rate cut cycle and institutions' continued accumulation of Bitcoin have become the driving forces behind Bitcoin's rise.
3: Institutional Participation: Spot ETFs and the wave of accumulation, the prelude to a global cryptocurrency reserve competition.
Spot ETFs (Exchange Traded Funds) differ from previous futures ETFs in that they directly hold actual Bitcoin, providing a convenient and safe investment tool for traditional financial institutions and ordinary investors. Since the approval of ETFs at the beginning of 2024, liquidity has surged, enhancing Bitcoin's trading depth and stability. The asset management companies behind the ETFs are required to hold a large amount of actual Bitcoin, resulting in a decrease in the Bitcoin available for circulation in the market, thus exacerbating supply-demand imbalances. In addition to the U.S., similar ETF products have been launched in other regions, including Europe, Canada, and Asia, with investors in these areas also accelerating their layouts.
The increased holdings by nations and institutions are undoubtedly the main source of this demand. In 2024, the amount of Bitcoin held by various governments accounts for 2.5% of the total supply.
As of the end of November 2024, North American listed miners had accumulated over 73,000 Bitcoins.
Looking back at President Trump's statements during his campaign, 'I want Bitcoin to be mined, minted, and manufactured in the U.S.' sends a strong signal to global investors: the U.S. is committed to becoming an undisputed Bitcoin mining powerhouse. If the U.S. can fully implement policy support and effectively integrate energy and technology resources, its goal of 'mining in the U.S., minting in the U.S., and the future belongs to the U.S.' could become a strategic declaration for the U.S. in the global cryptocurrency field in the Bitcoin era. Notably, with the development of AI, we can predict that in the future, computing power will be productivity.
Monthly BTC production ratio of 16 mining listed companies.
(https://pro.theminermag.com/overview/bitcoin-liquidation-public-mining)
In addition to nations, institutions such as BlackRock are making significant purchases, and accumulating Bitcoin is gradually becoming a new trend in corporate asset allocation.
MicroStrategy's Bitcoin strategy has sparked imitation, with BitcoinTreasuries data showing that about 144 companies currently hold Bitcoin on their balance sheets. The transformation of accounting standards is key: On November 16, 2024, the Financial Accounting Standards Board (FASB) officially implemented new fair value accounting standards, allowing companies to report assets at fair market value of Bitcoin rather than historical cost. This change provides companies with more flexibility in asset classification and management, significantly reduces holding risks, and offers institutional support for more companies to adopt Bitcoin.
MicroStrategy currently holds 439,000 Bitcoins. The company will be included in the Nasdaq 100 index on December 23 this year, becoming the first Bitcoin company to enter that index, and Bitcoin mining company MARA Holdings may be next.
The ten companies holding the most Bitcoin.
Looking ahead to 2025: Bitcoin's future potential.
Geoff Kendrick, head of global digital asset research at Standard Chartered, predicted in a recent report that the pace of institutional funds flowing into Bitcoin will continue to maintain or even exceed the levels of 2024.
In terms of Bitcoin ETFs in the United States, Standard Chartered noted from the 13F filings submitted to the SEC that pension funds currently hold only 1% of the total shares in nine new Bitcoin ETFs. However, with the easing of the regulatory environment following the Trump administration's rise to power, it will become easier for traditional financial institutions to invest in digital assets. If U.S. pension funds, a massive market totaling $40 trillion, allocate a small portion of their assets to Bitcoin, it is bound to have a significant impact on the price.
Strategic reserve funds are also a key driving force behind the rise in Bitcoin prices. Even if global foreign exchange reserve managers allocate just 1% of their funds to Bitcoin, the amounts involved are substantial. This potential influx of funds, combined with the increasing institutional recognition, will become an important driving force for the development of the Bitcoin market.
2024 is just the beginning of the Bitcoin bull market; Bitcoin's upward momentum has only just begun. If U.S. pension funds, global sovereign wealth funds (SWF), or the potential U.S. strategic reserve fund absorb Bitcoin more quickly, it is feasible for Bitcoin to rise to around $200,000 by the end of 2025, marking the peak of this cycle.
In the long run, Bitcoin not only has the potential to replace gold as the world's largest reserve asset but will also gradually integrate into the diversified asset allocation of institutional investors, even becoming an important part of corporate financial strategy. This change will fundamentally reshape the global financial landscape and establish Bitcoin's core position in the new economic system.
The final 'Mega Cycle': Opportunities and challenges coexist.
This bull market may be the last 'Mega Cycle' with huge growth potential for BTC.
From a macro perspective: Bitcoin represents the third capitalized medium in human financial history.
At the macro level: it is the core index of the Web3 digital economy.
At the micro level: Bitcoin is attracting the attention of global traditional capital amidst the wave of compliance, gradually integrating into the mainstream financial system.
As Matrixport said, 'The success of 2024 lays the foundation for a strong start in 2025.' For investors, this is not only a shining moment for Bitcoin but also an unmissable capital feast.
Many investors look back at the beginning of 2024 and lament not increasing their investment efforts. The last 'grassroots cycle' of BTC, are you ready to embrace the next wave of BTC?
