2024 has been a historic year for the cryptocurrency market, especially Bitcoin. The year began with the news that Wall Street fund managers, including BlackRock, Fidelity, and Ark Invest, launched the first-ever exchange-traded funds (ETFs) backed by the flagship cryptocurrency.
This event combined with the Bitcoin network’s quadrennial reward halving event, resulted in a 50% reduction in its supply, increasing market demand and value of the cryptocurrency. BTC recorded a new all-time high of $73,798 after a surge in spot Bitcoin ETF trading activity and hype surrounding the reduction in rewards to 3.125 BTC per block mined.
The halving event is historically perceived as positive for Bitcoin’s price, as it helps control the supply while increasing demand.
What Is Driving Bitcoin’s Surge?
However, following the U.S. presidential elections, where pro-crypto Republican candidate Donald Trump made a commanding victory, and the Federal Reserve’s subsequent decision to cut its rate by 25 basis points, to a range of 4.50% to 4.75%, Bitcoin’s price skyrocketed to a $91,000 – its highest valuation to date.
Between its September 2021 high of $69,000 and the current peak, Bitcoin has endured a tumultuous period, losing over 65% of its market value. The crypto market was underlined by the shocking events of 2022, where crypto enthusiasts were taken aback by events such as the bankruptcies of crypto lending and trading platforms Celsius, BlockFi, and FTX, the legal issues surrounding Binance, and the crash and burn of Terra Luna.
The apex cryptocurrency has put its losses behind to surge to impressive highs, surpassing its all-time highs multiple times post-Trump’s win. This resulted in the market capitalization of Bitcoin propelling to 1.73 trillion, which contributed heavily to the overall capitalization of the crypto market hitting $3 trillion.
The spot Bitcoin ETFs have been a leading factor in the recent growth of BTC. Following the SEC’s approval of the investment products, many retail investors began showing increased interest in the crypto asset.
Moreover, large-scale investors, otherwise known as “Whales”, have started accumulating Bitcoin once again. As per CoinMarketCap, these large whales are holding approximately 248,600 BTC, worth $22.8 billion at press time. This indicates that larger investors have been filling up their wallets with substantial amounts of BTC, which may ultimately contribute to boosting the price of the cryptocurrency.
According to the latest price prediction data from CoinCodex, the general market sentiment for Bitcoin is bullish, with 29 technical analysis indicators signaling a bullish sentiment while only 5 signaled bearish. Currently, there are around 19.78 million BTC in circulation, out of the 21 million tokens that will ever exist.
Sumit Gupta, co-founder of cryptocurrency exchange CoinDCX, said that Bitcoin crossing the coveted $82,000 mark and reaching a historic $1.62 trillion underscored its resilience and appeal as a qualified hedge against the volatility of traditional financial markets. He also noted that market optimism driven by solid fundamentals and recent U.S. election results hint at friendlier laws in the country, while increased institutional interest, facilitated by the ETFs and evolving global regulatory clarity, further solidifies Bitcoin’s appeal as the “digital gold”.
Gupta added that if regulatory frameworks become more favorable to the industry, then the industry could see broader adoption of crypto assets by institutional investors, officially marking the end of the crypto winter and fostering a more robust digital asset ecosystem.
Will Bitcoin Price Hit $1 Million In 2025?
The next major psychological milestone for Bitcoin is the $100,000 mark, and reaching the price target could be fueled by further institutional interest, ETF inflows, and supportive legislation. This momentum, combined with Bitcoin’s unique fundamentals of scarcity, decentralization, and institutional acceptance would turn into a compelling asset for diversified portfolios.
Bitcoin enthusiasts often make overly optimistic and sometimes unrealistic price predictions for the cryptocurrency. Following the recent surge, there have been numerous discussions about where the price of BTC could go.
Amjad Raza Khan, CEO of crypto fintech Cashaa, said that BTC reaching a 1,000,000 valuation in 2025 is an ambitious target that will require extraordinary market dynamics to push the prices up by more than 1,100% in little over a year. Attaining this price point requires a combination of significant institutional adoption, widespread global economic instability that would prompt investors to seek alternative assets and a dynamic reduction in the supply of BTC.
Breakthroughs in crypto regulatory policies must also align, such as widespread acceptance of spot Bitcoin ETFs and a shift in the perception towards crypto assets on a global scale. While this seems to be possible, it remains a speculative scenario but would represent one of the most extreme financial transformations in modern history.
The bottom line here is that despite experiencing several major downfalls throughout its short history, Bitcoin has emerged stronger than before each time. This resilient nature of the apex cryptocurrency instills a belief among potential investors that there is value in decentralized virtual assets.
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