Bitcoin and the broader cryptocurrency market have seen a remarkable resurgence in 2024, shaking off the doldrums of a sluggish 2023.
This renewed energy comes after a couple of years riddled with scandals, high-profile collapses, significant losses, and a flurry of lawsuits. But now, with the tides seemingly turning, positive sentiment and increased adoption are on the rise, reflecting a growing confidence in these digital assets.
The momentum in the crypto space has been largely driven by some significant developments. Among them, the long-anticipated approval of spot Bitcoin exchange-traded funds (ETFs) in January stands out as a pivotal moment. This move, hailed by many as a watershed for the industry, was soon followed by the approval of spot Ethereum ETFs in May, marking another milestone.
These ETFs began trading on July 23, bringing a new wave of interest and investment into the market. The approval of these investment vehicles has not only bolstered confidence in the crypto space but has also made it more accessible to a broader range of investors.
A recent survey by Morning Consult underscores this growing interest. While cryptocurrency ownership has remained stable compared to the previous quarter, there’s a noticeable increase in the number of people considering entering the market. As of May, 17% of U.S. adults reported owning cryptocurrency, but what’s even more telling is that 25% of adults said they were likely to purchase cryptocurrency in the next month. This is a 3-percentage point increase since January 2024 and a 5-point jump since October 2023.
The broader crypto market has also been on a strong footing, with a global market capitalization standing at $2.14 trillion as of August 13, according to CoinMarketCap. Bitcoin, the largest and most well-known cryptocurrency, is priced at $60,896. Despite its notorious volatility, Bitcoin has surged over 107% in the past year, according to CoinGecko, reaffirming its place as a dominant force in the digital asset world.
One of the key factors contributing to this resurgence is the growing institutional acceptance and legitimacy of cryptocurrencies. The approval of Bitcoin and Ethereum ETFs has been a significant step in this direction, sparking widespread interest among investors who had previously been hesitant to enter the space. These ETFs have made investing in cryptocurrencies less intimidating and more accessible, especially for those who are more comfortable with traditional financial products.
Edward Corona, a trader, strategist, and publisher of The Options Oracle Newsletter, points out that Bitcoin’s scarcity and decentralized nature make it an attractive hedge against traditional market volatility and inflation. He describes Bitcoin as a “solid investment,” particularly in uncertain economic times.
Corona also highlights how these ETFs have simplified the investment process, making it easier for everyday investors to gain exposure to Bitcoin without the need to directly purchase and store the digital currency. This development could lead to a substantial influx of new investors, particularly those who prefer conventional investment vehicles.
While traditional stocks tied to the crypto space, such as MicroStrategy and Coinbase, have offered indirect exposure to cryptocurrencies, the excitement surrounding Bitcoin ETFs is palpable. These ETFs are likely to democratize access to Bitcoin, integrating it into the average investor’s portfolio in a way we haven’t seen before, says Corona.
Brian Dixon, CEO of Off The Chain Capital, echoes this sentiment, noting that the introduction of ETFs has created a “massive and easy onramp” for investors to enter the crypto space. The impact of these ETFs is already being felt, with assets under management in crypto investment products recovering from previous losses. According to an August 10 report by CoinShares, these assets had fallen to $75 billion during a market correction but have since bounced back to $85 billion.
Diversification is another compelling reason why investors are increasingly turning to cryptocurrencies. Dixon points out that the shifting macroeconomic outlook is prompting more investors to allocate a larger portion of their portfolios to crypto assets. The growth potential of cryptocurrencies, combined with their ability to diversify portfolios, makes them an attractive option for many investors.
Markus Levin, co-founder of XYO Network, adds that the recent price surge in cryptocurrencies is partly driven by growing adoption. As more people adopt and use the technology, future market drawdowns may not be as severe, further stabilizing the market.
Finally, some experts are predicting a significant price rally in the aftermath of the upcoming presidential election. Michael Terpin, founder of the crypto venture capital firm Transform Ventures, told Forbes that October and November are historically strong months for Bitcoin, especially in the year of the halving and the year after. He suggests that a Trump presidency could trigger a “rush of new buyers,” potentially pushing Bitcoin’s price to over $100,000.
In summary, as cryptocurrencies continue to rebound and gain legitimacy, more Americans are considering joining the crypto revolution. With growing institutional acceptance, easier access through ETFs, and the potential for portfolio diversification, the question isn’t just whether you should invest — it’s whether you can afford not to.
