Bitcoin was far and away the best-performing asset class in 2024 as recent exchange-traded funds ushered in additional widespread adoption and hopes for deregulation under a recent presidential administration lifted digital assets to record levels.
But owning cryptocurrency also got here with its usual unpredictability and dizzying swings, as this month’s trading clearly illustrates. Bitcoin has greater than doubled in price since starting the yr within the $40,000 range, with it last trading near $94,000. Ether has scored an almost 50% year-to-date gain, and last traded at around $3,355.
Bitcoin and ether for the reason that start of 2024
Probably the most prosperous stretch of the yr occurred within the weeks following the U.S. presidential election. By mid-December, the cryptocurrency had rocketed above $108,000 for the primary time, fueled by optimism that President-elect Donald Trump’s victory over Vice President Kamala Harris would open the door for greater regulatory clarity and send recent money rushing into the sector.
Since then, nevertheless, prices have eased. Bitcoin is negative for the month, hurt by the expectation that the Federal Reserve’s rate cuts will roll out at a slower-than-anticipated pace. The market has also faced a stretch of apparent profit-taking and choppiness into the tip of the yr.
The yr began with a powerful boost of confidence from the introduction in January of latest ETFs that hold the cryptocurrency. The funds, that are pitched by asset managers as an easier way for investors to access bitcoin, have pulled in tens of billions of dollars of money this yr. The iShares Bitcoin Trust ETF (IBIT) now has greater than $50 billion in assets.
Microstrategy shares this yr
Ether ETFs joined the joy in July. The demand for those funds has not been as strong as for his or her bitcoin counterparts, however the category has still attracted greater than $2 billion in net inflows in lower than six months, in keeping with FactSet.
Strong tail winds for cryptocurrencies also lifted connected stocks to record levels. Bitcoin proxy Microstrategy has skyrocketed greater than 360% for the reason that start of the yr, while Coinbase and Robinhood have rallied about 43% and 196%, respectively. MicroStrategy shares have surged since mid-December as the corporate was added into the Nasdaq 100 index.
Some mining stocks, nevertheless, have not performed as well, with Mara Holdings and Riot Platforms on course for double-digit year-to-date losses. The drop in mining stocks could also be a direct results of this yr’s bitcoin halving, which reduced the block rewards. Together with transaction fees, that is one of the vital significant ways miners make cash.
— CNBC’s Jesse Pound contributed reporting.
