Bitcoin Was The Best Investment Of 2024, But Not Without Its Usual Volatility

New exchange traded funds (ETFs) drove Bitcoin to become the best performing asset of 2024 with hopes for a new U.S. presidential administration. Bitcoin more than doubled its price from the start of the year, going past $108,000 in mid-December beforestarting near $40,000. Also performing well, Ether gained approximately 49% year to date, about $3,355 at year end.

However, that momentum followed the U.S. presidential election as President-elect Donald Trump beat Vice President Kamala Harris and the promise of regulatory clarity. Significant investments were attracted into the sector due to this optimism. But Bitcoin’s volatility was too high – for instance, in December the Bitcoin price moved back below $94,000 as traders pulled some profits in an anticipation of slower than expected Federal Reserve rate cuts.

However, the success of the year was anchored by the launch of Bitcoin ETF’s in January. The iShares Bitcoin Trust ETF (IBIT) alone has amassed tens of billions of dollars in assets, and these funds, intent on simplifying the investment in cryptocurrency, did just that. In six months, the market for Ether ETFs also racked up more than $2 billion in net flows.

Crypto related stocks benefited from this bullish environment. Among other Bitcoin proxies, MicroStrategy surged over 360% and landed on Nasdaq 100 index. Price gains of 43 percent were posted by Coinbase and 196 percent by Robinhood. However, despite these successes, mining stocks did not do well. Riot Platforms and Mara Holdings both saw double digit loss, another likely casualty of Bitcoin’s halving, which reduced the block rewards on which miners rely heavily for revenue.

Bitcoin’s dual nature of an investment that can be a winner or lose as much money came to the fore in 2024. ETFs and political shifts brought growth, however, the unpredictable market dynamics were reminders to investors of the risk of cryptocurrency trading. In looking ahead, however, the industry’s resilience and adaptability will be key to this momentum.