Bitcoin’s 2024 Surge: Is This the Crypto Comeback of the Decade?

Kimi Basamak
Nov 23, 2024
4 min read

Recently, Bitcoin (BTC) has seen its value shoot up in a massive comeback after the ‘crypto winter’ of the last two years, with its price surpassing $90,000 per Bitcoin. This recent surge since early 2024 has been primarily driven by the SEC’s approval of spot ETFs for the cryptocurrency, making it easier to invest in Bitcoin through funds and retirement accounts.

This marks a positive shift by the US government towards making cryptocurrency a standard investment option for the public, with Ethereum also gaining ETF approval in 2024.

Understanding Bitcoin

Bitcoin is a speculative asset, so unlike stocks and bonds, it does not provide any dividends or interest over time. Because of this, the market value of one Bitcoin is only driven by demand and perceived value, since there is no business or corporation that can give insight into whether the asset will perform well or badly.

Even though Bitcoin has seen a sharp rise in value over the last five years as crypto stocks have increased in popularity as investments, the price is very volatile and can fluctuate dramatically. One example of Bitcoin’s fluctuation is its 60% value loss in 2022, following market trends but at a much more unstable and extreme rate.

Bitcoin’s Appeal and Risks

Despite its volatility, Bitcoin has still attracted investors because of its role as a portfolio diversifier. Since investors spread risk across different asset classes, the relative independence of cryptocurrency from other sectors may act as a fail-safe in case of market collapse.

The speculative nature of the asset has caused an expression of caution by the Department of Labor with its inclusion for retirement plans and 401k accounts. Recently, though, Bitcoin has shown trends closer resembling the market, showing that the standardization by governments is cementing itself as an asset class similar to stocks and bonds.

Bitcoin price history (USD) - Risen more than 10,000% over the last decade

Caution is suggested by experts for those considering Bitcoin as an investment because of the discussed volatility. Even though Bitcoin trends upward, it remains high-risk with little intrinsic value for investors to bank on. At the moment, Bitcoin remains a relatively short-term investment for many who try to maximize the fluctuations that the price seems to follow, particularly with relation to geopolitics and governmental regulation on cryptocurrency.

Although for the moment there is a positive outlook for the future of Bitcoin as a regular part of economies, there remain too many concerns that could see its value drop.

Bitcoin in 2024: Adoption, Volatility, and Investment Trends

The rise in Bitcoin’s price and other cryptocurrency prices in 2024 may indicate a shift into mainstream adoption of cryptocurrency as an asset. The sustainability of these trends, however, does not seem to extend to the long-term because of uncertain future legislative regulation. Only once Bitcoin is standardized against a currency or other tangible medium will its price start to become more defined and easier to integrate into consumer business and other sectors.

The new ETF approvals for Bitcoin mark a development that may progress the currency toward this ultimate goal. They allow access to Bitcoin from institutional investors and offer a more regulated way to invest, helping create more market stability.

ETF approval for Bitcoin — Bitcoin ETF approval marks a major milestone for crypto

The largest factor affecting Bitcoin’s future is its volatility, which gives the asset both benefits and drawbacks. While the potential for large price gains in the short term is attractive to investors, the stock is also subject to sharp declines and long-term instability. Because of this, Bitcoin at its current state is not suitable for risk-averse investors because not only is it unpredictable, but it also does not generate income over time like a dividend-stock would. The stock is, on the other hand, very fitting for risky investors and day traders, who try to capitalize on the steep fluctuations of the price to create large profit over short periods of time. It also fits the role of a diversifier, acting as a hedge against the market.

Regulation’s Impact on Crypto

The new regulatory attention on Bitcoin and other cryptocurrencies has created new trends for their stocks, and this trend is likely to continue as more and more governments are pushing to integrate them into global financial markets. Governmental regulation will provide more clarity and security for investors as the stock’s volatility will decrease, but these regulations may also lead to stricter controls over the cryptocurrency market. Some investors may see this control as a downside to cryptocurrency’s perception as a control-free asset.

Retirement plan administrators remain hesitant to include cryptocurrency assets in their offerings, especially since the US government has consistently warned the public about the risks they pose. It is difficult to see any sort of cryptocurrency asset become a large part of retirement portfolio since they tend to be relatively low-risk and mainly hold bonds or large stocks.

Crypto’s Future

Looking ahead, institutional acceptance and new legislation are directly tied to the growth of the cryptocurrency market. Governments are also considering promoting proprietary digital currencies to avoid reliance on the uncontrollable Bitcoin.

These developments would promote the use of cryptocurrency as legal tender but would not be a positive sign for Bitcoin or its market value. Following the 2024 US presidential election, prices for cryptocurrency soared as people believe the elected office will create policy promoting governmental involvement in cryptocurrency markets. Initiatives by government bodies like this will continue to boost aspirations from investors and will cause overall societal benefit.