Bitcoin surges 120% in 2024 amid spot ETF approval, Trump optimism

Bitcoin more than doubled in 2024, spurred by the US market regulator’s approval of exchange-traded funds (ETFs) linked to its spot price and growing optimism over reduced regulatory hurdles as Donald Trump prepares to return to the White House.

Last month, the world’s largest cryptocurrency surged past the $100,000 mark, a landmark achievement that has ignited 'animal spirits' among advocates of this now mainstream asset class.

A more than 120% surge in bitcoin in 2024 and a nearly 50% jump in ether, the second-largest cryptocurrency, have propelled the sector's market value to roughly $3.5 trillion, according to CoinGecko data.

More gains are in store for 2025, according to analysts.

"We remain convinced $100,000 is not the final milestone. We expect Bitcoin to hit a cycle-high of $200,000 in late 2025," analysts at brokerage Bernstein wrote in a client note last month.

MicroStrategy, a software firm that has become the world's largest corporate holder of bitcoin, has seen its shares surge nearly five-fold in 2024.

The stock, which joined the benchmark Nasdaq-100 index recently, is now seen as a proxy for bitcoin, with its movement closely tied to sentiment towards the digital asset. Several smaller companies are following its playbook and allocating portions of their cash to bitcoin.

"We expect bitcoin to emerge as the new-age premier 'store of value' asset eventually replacing gold over the next decade and becoming a permanent part of institutional multi-asset allocation and a standard for corporate treasury management," the Bernstein note said.

Much of the optimism began in January when the US Securities and Exchange Commission approved the first ETFs to track the spot price of bitcoin, marking a watershed moment for the broader crypto industry.

The move gave the sector institutional legitimacy and improved its mainstream appeal as traditional finance heavyweights including BlackRock and Fidelity launched the products.

The victory of Trump, who has promised to make the United States the "crypto capital of the planet," further bolstered the industry's position later in the year. Crypto advocates donated millions during the election, hoping to elect candidates that favor the sector.

Most crypto stocks have also benefited from the industry-wide rally. The big winners of 2024 are MicroStrategy, crypto exchange Coinbase and bitcoin miner Hut 8.

On the other hand, several other crypto miners have reeled under shrinking margins due to higher energy and hardware costs, missing the year's rally.

Shares of Riot Platform, Marathon Digital and Bit Digital lost between 26% and 32% last year.