Bitcoin is by far the best-performing asset class in 2024, as widespread adoption of new exchange-traded funds (ETFs) and hopes for deregulation under a new presidential administration push digital assets to record levels. It became.
But as this month’s transactions clearly demonstrate, owning cryptocurrencies also comes with the usual unpredictability and dizzying fluctuations. Bitcoin Its price has more than doubled since the beginning of the year in the $40,000 range, and it is currently trading around $94,000. ether The stock is up nearly 50% since the beginning of the year, and was most recently trading at around $3,355.
Bitcoin and Ether since early 2024
The most prosperous period of the year occurred in the weeks following the US presidential election. By mid-December, the cryptocurrency had surpassed $108,000 for the first time, with President-elect Donald Trump’s victory over Vice President Kamala Harris opening the door for regulatory clarity and bringing new capital into the sector. This was boosted by optimism that there would be an influx of people.
However, prices have since stabilized. Bitcoin has turned negative this month on expectations that the US Federal Reserve will cut interest rates at a slower pace than expected. The market also faced clear profit-taking and volatility towards the end of the year.
The year started with a strong sense of confidence following the introduction in January of a new ETF holding cryptocurrencies. The fund, touted by asset managers as an easy way for investors to access Bitcoin, has attracted tens of billions of dollars in cash this year. The iShares Bitcoin Trust ETF (IBIT) currently has over $50 billion in assets.
Microstrategy stocks of the year
In July, the Ether ETF also joined in on the excitement. Demand for these funds is not as strong as that for Bitcoin, but the category has still attracted more than $2 billion in net inflows in less than six months, according to FactSet.
Strong tailwinds for cryptocurrencies also pushed connected stocks to record levels. bitcoin proxy micro strategy While it has soared more than 360% since the beginning of the year. coinbase and robin hood They rebounded by about 43% and 196%, respectively. MicroStrategy’s stock price has soared since mid-December after the company was included in the Nasdaq 100 index.
However, some mining stocks haven’t performed as well. Mara Holdings and riot platform It is on track to achieve double-digit losses since the beginning of the year. The drop in mining stocks could be a direct result of lower block rewards due to this year’s Bitcoin halving. This, along with transaction fees, is one of the most important ways miners make money.
—CNBC’s Jesse Pound contributed reporting.
