Thomas Daniels
Bitcoin has outpaced nearly every major asset class in the past year, delivering a stellar 124% increase in spot prices since September 2023, according to a report released on Sept. 19 by VanEck, a leading asset manager. Despite a recent market pullback that unsettled some investors, Bitcoin’s market capitalization has surged to approximately $1.25 trillion, now accounting for 56% of the entire cryptocurrency market, a 15% rise from a year ago.
VanEck anticipates that Bitcoin’s long-term bull market will persist, driven by factors fundamentally different from those influencing the cryptocurrency’s rise in 2023. Bitcoin’s previous retail-driven adoption, bolstered by the popularity of “inscriptions”—a feature that allowed users to store media files directly on the blockchain—has faded, contributing to a 52% year-over-year decline in transaction fees.
The asset manager notes that Bitcoin’s 2024 price appreciation is now more closely tied to its growing role as a store of value and a means of transferring wealth. The introduction of spot Bitcoin exchange-traded funds (ETFs) in the U.S. earlier this year has accelerated institutional adoption. Data from Morningstar shows that these ETFs now manage approximately $55 billion in net assets, with wealth advisors embracing the funds at an unprecedented rate.
“Bitcoin’s long-term growth is underpinned by enduring macro trends: increasing demand for decentralized, censorship-resistant networks, growing institutional participation, and rising sovereign involvement in mining and cross-border trade,” said Matthew Sigel, VanEck’s head of digital assets research.
However, Bitcoin miners have struggled, facing a challenging year in 2024, largely due to the April Bitcoin halving event, which cut mining rewards from 6.25 BTC to 3.125 BTC per block. As a result, the Bitcoin Hashprice, a key industry profitability metric, has plummeted by 97% over the past year, severely impacting mining operations.
