Few anticipated that 2024 would become the pivotal year for Bitcoin. Following the disastrous year of 2022, Bitcoin spent the majority of 2023 in recovery mode.
The numerous high-profile collapses throughout 2022—including TerraUSD, Three Arrows, Celsius, and, most notably, FTX—continued to negatively impact market sentiment.
While the world’s largest cryptocurrency successfully rebounded from a significant downturn, achieving a 150% gain by the end of 2023, the intense hype that fueled Bitcoin’s record-breaking surge in 2021 seemed to have faded.
Regulatory Bodies Approve Bitcoin ETFs in January
The first major Bitcoin milestone of the year occurred just weeks into 2024. On January 11th, the U.S. Securities and Exchange Commission (SEC) granted approval for spot Bitcoin exchange-traded funds (ETFs) for the first time.
SEC Chairman Gary Gensler, known for his skepticism toward cryptocurrencies, approached the approval with significant caution.
“While we have approved the listing and trading of certain spot Bitcoin exchange-traded products (ETPs) today, we have not approved or endorsed Bitcoin itself,” he remarked. “Investors should remain wary of the numerous risks associated with Bitcoin and products linked to crypto.”
Gensler emphasized his view that, unlike ETPs holding physical commodities such as precious metals, Bitcoin is “a speculative, volatile asset that is also utilized for illicit activities, including ransomware attacks, money laundering, sanctions evasion, and terrorist financing.”
Despite these reservations, the approval marked a significant achievement for Bitcoin.
Major asset managers like BlackRock, VanEck, Fidelity, and Grayscale were finally able to list their Bitcoin investment products on the New York Stock Exchange, thereby attracting billions of dollars in traditional investment capital to the spot market.
The adoption of Bitcoin ETFs was so swift that by December, their assets under management (AUM) nearly exceeded those of gold ETFs.
April marks the halving event.
Bitcoin halving can be a complex concept for casual investors to grasp, but it is a fundamental component of its anti-inflationary economics.
Essentially, Bitcoin halving is a programmed event that occurs approximately every four years, reducing the reward for mining new blocks by half. This mechanism ensures that the total supply of Bitcoin will approach, but never exceed, 21 million coins.
As a result, Bitcoin operates on a deflationary economic model, contrasting with traditional inflationary currencies that can be printed in unlimited quantities.
The most recent Bitcoin halving took place this April, specifically on the 19th.
At the time of the halving, Malcolm Palle, founder and executive chairman of Aquis-listed Web3 investor Coinsilium, commented: “In previous cycles, the impact of the halving on the market was never immediate, and I don’t anticipate any change this time around.
“That said, the halving has always established a very positive foundation for the onset of the next bull phase, which many in the sector expect to occur again.”
Clearly, when looking back at Bitcoin’s price appreciation since April, his prediction proved accurate.
Trump Emerges Victorious Over Democrats in November
Historically, politics and cryptocurrency haven’t intersected much, but incoming President-elect Donald Trump aimed to attract the crypto community ahead of the November elections.
His campaign pledges included transforming the US into a crypto hub with the support of pro-crypto advocates, establishing a federal Bitcoin reserve, and removing SEC Chair Gary Gensler from his position.
Consequently, Trump’s decisive victory over Democratic contender Kamala Harris initiated what has been dubbed the great “Trump trade.”
Indeed, most of Bitcoin’s impressive 150%+ annual gains occurred after Trump secured the presidency.
In early December, Trump announced the appointment of former PayPal Chief Operating Officer David Sacks as his “White House AI & Crypto Czar.” An enthusiastic Trump supporter who reportedly raised millions for his campaign, Sacks “will guide policy for the Administration in Artificial Intelligence and Cryptocurrency, two areas critical to the future of American competitiveness,” Trump stated on Truth Social.
To prevent direct conflicts with the incoming administration, Gensler swiftly resigned. Subsequently, Trump appointed Paul Atkins, CEO of consultancy firm Patomak Partners, as the new SEC Chair in January.
Additionally, many members of Trump’s inner circle, including Elon Musk and Vivek Ramaswamy, hold pro-crypto views.
How Did Bitcoin Measure Up?
Outstanding Performance.
In the spot markets, the BTC/USD pair reached an all-time high of $108,353 on December 18th. Although it has since dipped below $100,000, it remains 125% higher at the time of writing.
In comparison, the S&P 500 grew by 25%, gold increased by 26%, and the popular AI stock Nvidia Corp surged by 175% (you can’t win them all).
In summary, Bitcoin was one of the top-performing asset classes of the year.
