Bitcoin has been skyrocketing for the past year, rising from a low of $15,000 in 2022 to a high of $52,000 by mid-February. Bitcoin’s bullish movement is good news to the entire crypto industry.
Ethereum, the second largest cryptocurrency is trading selling at $2,900—more than 200% of its value last year. Another cryptocurrency flying sky high is Solana, which cost $9 at one time last year. Now it’s worth at least $110.
What’s fueling crypto’s growth?
Bitcoin Exchange Traded Funds
Bitcoin was already surging months before an expected ETF approval in the US on January 10. When the day of reckoning arrived, Bitcoin had risen to a new year high of 44,000.
The cryptocurrency retraced to $39,000 in the weeks following the ETF approval. However, Bitcoin is rising again. American investors are buying Bitcoin in droves. In fact, BTC purchases related to the January approval have boosted the coin’s value to its current price of $52,000.
Exchange-traded funds allow people to invest in Bitcoin without actually owning it. You see, buying BTC means finding an appropriate crypto exchange, investing in a crypto wallet, and holding your funds.
An ETF allows you to buy Bitcoin through a broker. Then you can reap the benefits when Bitcoin grows. But you also risk losing money if you sell during a downward trend.
The US approved 11 ETFs on January 10. They include BlackRock, Fidelity, and Grayscale—three of the biggest investment brokers in North America. People generally trust ETFs more than other investments, which is why financial experts believe that Bitcoin ETFs will drive Bitcoin's value to as much as $100,000 by the end of this year.
Increased Global Adoption
Another major factor influencing crypto's growth in 2024 is its growing adoption around the world. Banks, restaurants, shopping sites, and even colleges are now accepting crypto as a means of payment.
In fact, some businesses reward you for paying with Bitcoin or Ethereum. The online gambling industry is an excellent example. These Ethereum sports betting sites match your first deposit 100% for a maximum of 1000 USDT.
Online businesses love crypto for several reasons. First, crypto helps minimize fraud. Unlike cards, you can’t ask for a Bitcoin chargeback—payments can’t be reversed.
Secondly, Bitcoin can help a business grow globally. Crypto has no borders, meaning people can use it to buy from your company regardless of where they live. Another reason why businesses love crypto is that it can be a hedge against inflation.
Bitcoin, in particular, has a circulation supply of 21 million coins. New coins are mined daily until the maximum supply is reached. So far, more than 18 million coins have been mined. Once the mining stops, Bitcoin’s value could soar to millions of dollars in value.
Bitcoin Halving
Bitcoin halving is an event that reduces the reward for mining Bitcoin by half. This process takes place every four years. When it does, the cryptocurrency industry usually surges.
The first Bitcoin halving took place in 2012. It reduced the mining reward from 50 BTC to 25 BTC. In 2016, the second half occurred. It lowered the reward to 12.5BTC.
The most recent halving took place in 2020 and lowered Bitcoin's mining reward from 12.5BTC to 6.25BTC. The upcoming halving in April will lower this reward to 3.125BTC, leading to a supply shock that could send Bitcoin's value soaring sky-high.
Meanwhile, people are buying Bitcoin in anticipation of the halving. As already mentioned, Bitcoin dropped to sub $40,000 once the ETF news was announced. It has since bounced back by 20% by the third week of February.
Bitcoin has never broken its previous all-time high before a halving event. But with the buying pressure growing continuously, anything could happen before the end of April.
The Stocks Market Rally
ETFs and the halving event aside, crypto is part of a resurging financial rally expected to soar throughout 2024 and part of 2025. Bitcoin collapsed around the same time as major stocks in the US.
In late 2022, stocks began bouncing back. The S&P 500 Index grew to more than 5000 points. More stocks resurged, thanks in part to news that the US Federal Reserve would reduce cut rates.
The US and UK stock market rally is growing steadily. As this happens, investors will start buying assets showing great promise. Bitcoin is proving to be a lucrative asset to both individual and corporate investors.
As we mentioned earlier, many people who bought Bitcoin last year are profitable. This is the same case for people who bought other major cryptocurrencies such as Solana, Ethereum, and Binance Coin.
Meme Coins
Meme coins are controversial cryptocurrencies with no real use cases. So, why would these coins drive crypto’s growth? For some reason, people love these coins.
Almost every crypto blockchain has hundreds of new meme coins launched daily. People buy meme coins because they offer the hope of doubling, or tripling your money overnight. Some people even make 10 times or 20 times their investments through meme coins.
Truth be told, buying meme coins is similar to gambling. You can lose your money at any time. Most of these coins are created by people aiming to con you. If that doesn’t happen, you might buy when a coin is trading at a high price. And then it crashes.
That said, not every meme coin is a scam. Coins like Doge and Shiba Inu have survived price manipulation for the last few years. And they're still listed on crypto exchanges.
Increased Public Awareness
Crypto grows due to public interest. Usually, people show more interest in Bitcoin when its value is rising. information about crypto in general spreads.
Crypto influencers tweet more. YouTubers create videos about crypto, while major news networks and celebrities share information about the public. Educating the public leads to a surge in the number of new investors.
Once Bitcoin establishes a new all-time high, it sort of crashes. People lose interest in crypto and the industry enters a bear market. Interest in crypto resurges once again as we approach a new halving event.