After a stellar start to the year, Bitcoin’s trajectory has notably flattened over the last three months, following a 45% surge in the first half of 2024. This early-year growth was driven by introducing US exchange-traded funds (ETFs) that tracked Bitcoin’s market price. However, since then, Bitcoin’s value has largely fluctuated between USD 56,000-63,000.
Market participants are now looking beyond this mid-year stability to identify new potential catalysts as 2025 approaches. While broader macroeconomic factors such as interest rate fluctuations and the upcoming presidential election remain on their radar, traders and investors are also eyeing developments in the cryptocurrency space itself.
One event that caught the attention of the crypto community was the US Securities and Exchange Commission’s (SEC) approval of BlackRock’s spot Bitcoin ETF. With the ETF launch, many traders, including Jake Ostrovskis from United Kingdom-based Wintermute, are anticipating the introduction of product options. Ostrovskis suggests that these options could attract a wave of US retail capital, which has so far remained cautious in Bitcoin markets.
However, regulatory hurdles remain. Youwei Yang, the chief economist at BIT Mining, noted that while the SEC oversees ETFs, the introduction of ETF-based options could require approval from the Commodity Futures Trading Commission (CFTC), which governs commodity derivatives. Since Bitcoin is classified as a commodity, this additional layer of regulation could delay the arrival of these options.
Yang added that if ETF options become available, they could increase volatility in the Bitcoin market, potentially attracting more institutional and retail participation. Increased volatility may appeal to sophisticated investors seeking higher returns, while additional retail capital could add liquidity, further shaping Bitcoin’s future.
Crypto Growth Amid ETF Approvals
The year 2024 has been a milestone for Bitcoin and the broader crypto market. The approval and anticipation of US ETFs sparked a flurry of activity, with Bitcoin’s appeal spreading to institutional investors and mainstream financial markets.
According to CoinGecko data, the cryptocurrency market’s capitalisation rose dramatically from USD 8.3 billion at the start of 2023 to USD 2.2 trillion by October 1st, 2024. This surge has been attributed to the growing interest in digital assets that mirror traditional financial structures, such as ETFs.
Ostrovskis commented on this trend, stating that there had been “a considerable increase in institutional onboarding and trading activity” throughout 2024. He also noted the strong demand for digital asset services that offer the familiarity and reliability of traditional financial markets, particularly among institutions.
Despite this growth, the Bitcoin market has been relatively calm. Research from Deutsche Bank shows that Bitcoin’s notorious volatility has tempered. The 90-day volatility, which stood at 67% in mid-2020, has decreased to 42% in 2024.
Still, external factors such as global conflicts continue to impact the cryptocurrency. For example, Bitcoin dropped by 5% following renewed hostilities in the Middle East. Observers noted that Bitcoin remains correlated with other cryptocurrencies and is still one of the first assets sold by investors during periods of uncertainty.
Global Cryptocurrency Adoption Trends
Chainalysis’ Global Adoption Index has revealed a striking increase in cryptocurrency usage between the fourth quarter of 2023 and the first quarter of 2024, surpassing levels seen during the 2021 crypto bull market. This adoption has been particularly robust in lower-income countries, where traditional banking services are often less developed or accessible.
India and Nigeria lead Chainalysis’ global rankings, with both countries showcasing high cryptocurrency adoption. In Asia, emerging markets such as Indonesia, Vietnam, and the Philippines have also shown strong adoption rates. Cryptocurrencies offer a critical alternative to traditional banking in countries like Argentina and Turkey, where high inflation and currency devaluation have eroded public trust in their local currencies.
According to Mauricio Di Bartolomeo, co-founder of the cryptocurrency lending company Ledn, Bitcoin, and stablecoins have proven their value in regions like Latin America.
“Although they may not trust their banks, the majority of the emerging world wants to bank in dollars,” said Di Bartolomeo.
Meanwhile, Chainalysis also highlighted a growing trend in stablecoin and decentralised finance (DeFi) activity in regions like Eastern Europe, Latin America, and Sub-Saharan Africa. In China, which ranked 20th on the adoption index, and South Korea (19th), crypto remains popular, though regulatory pressures are notable. The United States ranked fourth in the index and remains a significant player in the global cryptocurrency market.
Deutsche Bank’s research further solidifies the United States’ position, noting that it is the largest market in the world for cryptocurrency transactions, followed by India.
Trump And Harris On Bitcoin: Contrasting Stances?
As the Presidential election draws closer, the cryptocurrency industry is at a pivotal juncture. The stark contrast between Kamala Harris’ and Donald Trump’s positions on digital assets, with only a few weeks till the US election, portends a significant change for the cryptocurrency industry. Experts are already analysing how each candidate’s success would affect digital currencies and blockchain technology in the United States.
Donald Trump, who was formerly a strong opponent of Bitcoin, has changed his mind. He is now an advocate for cryptocurrencies, taking donations and putting forth ambitious initiatives. He intends to establish a national Bitcoin reserve and make the United States a leader in Bitcoin mining. Vice President Kamala Harris, on the other hand, had been mostly silent about cryptocurrency until recently.
Harris emphasised the need for consumer protection while expressing support for the cryptocurrency sector at a September event on Wall Street. She then went on to discuss her idea of an “opportunity economy” that combines AI and digital assets, to make the United States a leader in blockchain technology.
Bipartisan support for cryptocurrency is growing, and industry leaders are taking notice. Hayden Adams, the founder of Uniswap, commended Harris’s visionary outlook, which contrasted with President Joe Biden’s more cautious approach.
However, other people think Harris’ policy requires further clarification, such as Bernstein analyst Gautam Chhugani. He said the cryptocurrency industry might gain more traction under Donald Trump.
Bitcoin’s Future Amid Global Shifts
As 2024 draws to a close, Bitcoin faces both new opportunities and challenges. While its price has remained stable in recent months, upcoming developments, such as the potential launch of ETF options, could spark renewed market activity. Simultaneously, the evolving regulatory landscape, both in the United States and globally, will continue to play a significant role in shaping Bitcoin’s future.
With growing global adoption and increasing institutional interest, Bitcoin’s long-term trajectory remains promising, even as it faces headwinds from traditional markets and geopolitical uncertainties. The next major catalyst may be just around the corner.