By Manya Saini
(Reuters) – Bitcoin will more than double in 2024 on U.S. markets regulator approval for spot-linked exchange-traded funds and optimism about easing regulatory hurdles as Donald Trump looks set to return to return to the White House.
The world’s largest and best-known cryptocurrency hit $100,000 earlier this month, a milestone that has sparked “animal spirits” among followers of the once-nascent asset class.
A more than 120% increase in bitcoin this year and a nearly 50% jump in ether, the second-largest cryptocurrency, have pushed the sector’s market value to about $3.5 trillion, according to data from CoinGecko.
According to analysts, even more gains are on the horizon in 2025.
“We remain convinced that $100,000 is not the final milestone. We expect Bitcoin to reach a cycle high of $200,000 by the end of 2025,” analysts at brokerage Bernstein wrote in a client note earlier this month.
MicroStrategy, a software company that has become the world’s largest corporate holder of bitcoin, has seen its shares grow nearly fivefold by 2024.
The stock, which recently joined the benchmark Nasdaq-100 index, is now seen as a proxy for bitcoin, with its movement closely tied to sentiment towards the digital asset. Several smaller companies are following the playbook and allocating some of their funds to bitcoin.
“We expect bitcoin to emerge as the new store of value asset that will ultimately replace gold over the next decade and become a permanent part of institutional multi-asset allocation and a standard for corporate treasury management,” according to the Bernstein note.
Much of the optimism started in January when the U.S. Securities and Exchange Commission approved the first ETFs to track the spot price of bitcoin, marking a turning point for the broader crypto industry.
The move gave the sector institutional legitimacy and improved its mainstream appeal as traditional financial heavyweights, including BlackRock and Fidelity, launched the products.
The victory of Trump, who has promised to make the United States the “crypto capital of the planet,” further strengthened the industry’s position later this year. Crypto advocates donated millions during the elections, hoping to elect candidates who favor the sector.
Most crypto stocks have also benefited from the sector-wide rally. The big winners of 2024 are MicroStrategy, crypto exchange Coinbase and bitcoin miner Hut 8
On the other hand, several other crypto miners have suffered from shrinking margins due to higher energy and hardware costs, causing them to miss the year’s rally.