Bitcoin’s Breakout Year: 2024’s Top Catalysts
As the clock strikes midnight, ushering in a new year, it’s time to reflect on the monumental milestones achieved by Bitcoin in 2024. The apex cryptocurrency shattered records, soaring past the $69,000 mark and reaching an unprecedented $100,000. This remarkable journey was fueled by several pivotal developments that propelled Bitcoin to new heights.
A Crypto-Friendly Presidency
The election of Donald Trump, a vocal supporter of cryptocurrencies, proved to be a significant bullish trigger for Bitcoin. Since his electoral triumph, the leading cryptocurrency has surged 41%, peaking at $108,000. Trump’s campaign promises, including the establishment of a national Bitcoin reserve, and his appointment of pro-cryptocurrency venture capitalist David Sacks as the “White House A.I. & Crypto Czar,” signaled a commitment to fulfilling his election promises.
Institutional Adoption Takes Center Stage
The successful launch of the first-ever U.S. exchange-traded funds (ETFs) that track the price of Bitcoin in early 2024 paved the way for broader institutional adoption. These ETFs have seen net inflows of nearly $36 billion, with over $2 billion in transactions recorded as of December 26. BlackRock’s iShares Bitcoin Trust ETF emerged as the most successful fund, holding assets worth over $52 billion.
Monetary Policy Easing: A Boon for Risk-On Markets
The Federal Reserve’s decision to cut interest rates by 0.5% in September, followed by a 25-basis-point cut in subsequent months, delighted risk-on markets. This reduction in interest rates typically increases liquidity and borrowing power, leading to higher bets for stocks and cryptocurrencies, which are perceived to be risky investments.
The Halving Event: A Deflationary Catalyst
The quadrennial halving event, which took place in April, further squeezed the supply of an asset with deflationary characteristics. The event slashed the mining reward after each successful block validation from 6.25 BTC to 3.125 BTC. Previous instances of halving were followed by significant gains in Bitcoin, although some experts argue that the halving is already priced in.
A Year of Unprecedented Growth
As we bid adieu to 2024, it’s clear that Bitcoin’s remarkable journey was fueled by a combination of these pivotal developments. With the New Year comes new opportunities, and it will be fascinating to see how these catalysts continue to shape the future of the apex cryptocurrency.
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