A Remarkable Year for Bitcoin
Bitcoin has proven its resilience, outperforming nearly every major asset class over the past 12 months. According to a September 2024 report by VanEck, Bitcoin’s spot prices surged by 124% since September 2023, marking a significant shift in market dynamics. Its market capitalization, now approximately $1.25 trillion, accounts for 56% of the total cryptocurrency market—an increase of 15% year-over-year.
The Evolution of Bitcoin Adoption
VanEck highlighted a change in Bitcoin’s adoption dynamics. Unlike 2023, when retail-driven phenomena like “inscriptions” dominated, 2024 saw Bitcoin increasingly adopted as a store of value and medium of transfer.
Spot BTC exchange-traded funds (ETFs), authorized by U.S. regulators earlier this year, have significantly contributed to this trend. These ETFs, managing $55 billion in net assets, have been adopted faster than any other ETF in history, according to Bitwise CIO Matt Hougan.
Bitcoin Miners Face a Tough Year
While Bitcoin’s price has risen, miners have struggled. The April 2024 Bitcoin halving event reduced mining rewards from 6.25 BTC to 3.125 BTC per block, slashing profitability. The Bitcoin Hashprice—a key profitability metric—plummeted by 97% year-over-year.
Despite these challenges, VanEck remains optimistic about Bitcoin’s long-term growth, citing enduring themes like decentralized networks, increasing institutional adoption, and sovereign involvement in mining and cross-border trade.
