Great news for crypto investors, but terrible news for those of us in the proximity of an annoying bitcoin bro: Things have never looked this optimistic for the asset class.
Cryptocurrency has had an even better 2024 than Sabrina Carpenter. Bitcoin has climbed over 125% year-to-date, bringing with it ethereum, solana, and a host of other cryptocurrencies.
If your last impression of crypto was notorious fraud, Ponzi schemes, and of course, more fraud, you may be wondering how the industry managed to dig itself out of a bleak crypto winter.
Here’s how bitcoin went from being shunned by Wall Street veterans to becoming the best-performing asset of the decade.
- In January 2024, the Securities and Exchange Commission approved novel spot bitcoin exchange-traded funds after a decade of denying crypto asset managers’ application for this kind of ETF. What makes these funds unique is that they’re backed by actual bitcoin as opposed to just bitcoin futures contracts. Then in May, the SEC also approved spot ethereum ETFs. These funds have brought billions in new investments to the two most popular cryptocurrencies on the market. The largest bitcoin fund, the iShares Bitcoin Trust (IBIT) now has about $53 billion in assets under management.
- The re-election of President-elect Donald Trump in November was a huge boon to the industry, given the GOP’s warm embrace of cryptocurrency throughout Trump’s campaign. At the Bitcoin Conference this summer, Trump promised to create a national bitcoin stockpile and vowed to replace crypto-skeptic SEC Chairman Gary Gensler.
- Trump has already announced a slew of pro-crypto appointments, including former SEC commissioner Paul Atkins to lead the SEC. He’s also tapped former PayPal executive David Sacks for the role of “AI and Crypto Czar.”
A history lesson
It may have been a breakout year for bitcoin into the mainstream, but bitcoin is no spring chicken. The anonymous bitcoin founder Satoshi Nakamoto wrote his legendary whitepaper all the way back in 2008, and since then, bitcoin has been declared dead by the media 477 times. But it keeps coming back.
The big picture: Looking at bitcoin’s track record, it’s clear why investors have had a love/hate relationship with digital assets. It’s important to keep in mind that even many of the most bullish pro-crypto voices hedge their bets by making crypto a relatively small part of their overall portfolio.—LB
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