Bitcoin’s Remarkable Journey in 2024: Insights, Events, and Future Outlook

Bitcoin (BTC) experienced a rollercoaster year in 2024, marked by significant price fluctuations, groundbreaking events, and renewed optimism among investors. By December 25, Bitcoin closed at $98,429, representing a 131.5% year-to-date (YtD) increase compared to its closing price of $42,505 at the end of 2023.

Let’s delve into the factors driving Bitcoin’s performance and its potential trajectory.

Price Highlights and Market Capitalization

Bitcoin began 2024 on a challenging note, hitting its lowest price of $39,179 in mid-January. From this low, it soared 171.6% to reach its all-time high of $106,415 on December 17.

On December 18, Bitcoin’s market capitalization surged to $2.1 trillion, elevating it to the seventh-largest asset globally, surpassing major companies like Saudi Aramco, Meta Platforms, and Tesla.

At the time of writing this article on December 26, BTC is at $98,687 with a gain of 0.44%. A price that is not too encouraging because BTC’s price is predicted to touch $100,000 again on Christmas Eve.

Four Key Events Driving Bitcoin’s Performance

Bitcoin has 4 major events happening during 2024 that will cause the token to surge in price today.

1. Approval of Bitcoin Spot ETFs in January

The U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin Spot Exchange-Traded Funds (ETFs), including offerings from BlackRock, Fidelity, and ARK Invest.

These ETFs allow traditional investors to gain exposure to Bitcoin without directly holding the asset. The approval attracted an inflow of $35.47 billion into Bitcoin Spot ETFs by December 24, pushing Bitcoin to $73,000 shortly after the announcement.

2. Bitcoin Halving in April

On April 20, Bitcoin underwent its fourth halving, reducing the mining reward from 6.25 BTC to 3.125 BTC. Historically, halvings have triggered long-term price increases due to reduced supply.

While Bitcoin’s price consolidated between $63,000 and $64,000 immediately post-halving, it aligned with historical patterns, which often see significant price growth within six months to a year after such events.

3. Trump’s Pro-Crypto Presidential Victory in November

Donald Trump’s re-election as U.S. President on November 6 was celebrated by the crypto community.

His pro-crypto stance, including promises to make the U.S. the “crypto capital of the world,” boosted Bitcoin’s price by 10%, reaching $75,984. Trump’s policies are expected to foster a more favorable regulatory environment for cryptocurrencies.

4. Federal Reserve’s Interest Rate Cuts

Throughout 2024, the Federal Reserve cut interest rates by 100 basis points, including reductions of 50 bps in September and 25 bps each in November and December.

Lower interest rates typically benefit risk assets like Bitcoin by encouraging capital flow away from bonds and into alternative investments.

Market Dynamics and Challenges

Just like other crypto tokens, BTC also experiences price movements that go up and down. Here's how BTC's price dynamics will be throughout 2024.

1. Derivatives and Margin Markets

Despite significant price volatility, Bitcoin’s derivatives market maintained a neutral-to-bullish stance. Futures contracts traded at a robust 12% premium, reflecting strong demand for leveraged long positions.

Meanwhile, Bitcoin’s margin markets showed a 25x long-to-short ratio, indicating sustained bullish sentiment.

2. Whale Activity and Sell-Side Pressure

On-chain data revealed increased sell-side pressure from large investors during market downturns. The average Bitcoin transaction size peaked at $306,100 in December, the highest in two years, often signaling intensified sell-offs.

This behavior, combined with market uncertainty, poses short-term risks to Bitcoin’s price stability.

Bitcoin’s Future Prospects

So, what is the future of BTC? Here is an explanation that you can read.

1. Support and Resistance Levels

As of December 25, Bitcoin’s key support level stands at $90,500. Breaching this level could lead to further declines, with $88,000 as the next major support.

Conversely, breaking above the $99,426 resistance could signal a bullish recovery, potentially paving the way for a retest of the $108,353 high.

2. Tom Lee’s Prediction

Prominent analyst Tom Lee predicts Bitcoin could reach $250,000 by 2025, citing a friendlier regulatory landscape and increased adoption. He also highlights Bitcoin’s potential role as a Treasury reserve asset, which could significantly bolster its value.

Conclusion

Bitcoin’s performance in 2024 underscores its resilience and adaptability amid macroeconomic and geopolitical shifts. While challenges remain, such as heightened whale activity and economic uncertainty, the asset’s growing institutional adoption and favorable regulatory developments paint an optimistic picture for 2025 and beyond.

Investors and enthusiasts alike should keep a close watch on market trends, support levels, and policy shifts as Bitcoin continues its journey as a transformative global asset.