Bitcoin’s price surge was overshadowed by cryptocurrency’s breakthrough into mainstream finance.
Breakfast News: Bitcoin Goes Mainstream
December 31, 2024
| S&P 500 5,907 (-1.07%) |
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| Nasdaq 19,487 (-1.19%) |
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| Dow 42,574 (-0.97%) |
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| Bitcoin $93,733 (+0.56%) |
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2024 marked a defining year for Bitcoin (BTC -0.57%), as the cryptocurrency not only sustained its 2023 momentum but achieved unprecedented milestones. After climbing from $16,500 to $42,000 in 2023, Bitcoin shattered records in 2024, soaring beyond $100,000 in early December.
Yet Bitcoin’s price surge, while remarkable, was overshadowed by a more fundamental shift: Cryptocurrency’s breakthrough into mainstream finance. As 2024 draws to a close, the foundation has been laid for even broader institutional adoption in 2025 and beyond.
The ETF Floodgates Finally Open
The SEC’s January 10, 2024, approval of spot Bitcoin ETFs ended an 11-year regulatory standoff that began with the Winklevoss twins’ initial application in 2013. The market seized the opportunity: The iShares Bitcoin Trust (IBIT -0.93%) quickly established itself as the category leader, gathering $5 billion in its first weeks — enough to rank among the top 7% of all ETFs — before expanding to more than $50 billion by year’s end.
This breakthrough transformed Bitcoin’s accessibility landscape. The familiar ETF structure eliminated the technical barriers of crypto exchanges and digital wallets that had kept many traditional investors on the sidelines. More crucially, it provided institutional investors the regulated vehicle they needed to enter the market, unleashing a new wave of demand that helped propel Bitcoin to record heights.
Crypto Companies Join In
In a year in which AI chipmaker Nvidia (NVDA -2.33%) has grabbed the spotlight, it’s notable that crypto-related stocks like MicroStrategy (MSTR -4.40%) and Robinhood Markets (HOOD -2.67%) rivaled or even surpassed the tech giant’s performance in 2024. With Bitcoin handily outpacing major stock indexes this year, the crypto markets are rightfully poised to take center stage in the headlines come 2025.
Looking Ahead: Bernd Schmid’s Take
Have Realistic Expectations
Bitcoin’s long-term role might be as a wealth protector, rivaling gold. With gold’s $18 trillion market cap, 95% of which is held as a wealth store in vaults or as jewelry, it’s 9 times larger than Bitcoin. Achieving half of gold’s market cap could push Bitcoin’s price to around $500,000 in five years.
But it could take much longer. And I expect more 50% to 70% drawdowns along the way, as seen in 2022 and 2023, which will again unsettle emotional investors.
I’d hold Bitcoin as just one part of a diversified portfolio and regularly adjust my exposure. This means:
- Define a target allocation range.
- Dollar-cost-average down when the market pushes my holdings beyond my target.
- Dollar-cost-average up when it dips below my target.
This pre-set, mechanical approach can take the emotion out of decision-making when volatility inevitably rears its head.
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The Motley Fool has positions in and recommends Bitcoin and Nvidia. The Motley Fool has a disclosure policy.
