Bitcoin ETF Market Surges with $55 Billion Raised in 2024
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In a global economic context marked by uncertainty, Bitcoin continues to stand out for its exceptional performance. In 2023, the iconic crypto outperformed almost all other asset classes according to the VanEck report, confirming its central role in the global financial landscape. This upturn, supported by growing institutional adoption and the emergence of financial instruments such as Bitcoin ETF, goes beyond individual investors. Institutional funds and wealth managers now see it as a credible investment vehicle.
Bitcoin on an unstoppable streak
In 2023, Bitcoin recorded a 124 % increase. It outperformed almost all other asset classes. According to the VanEck report, this rise allowed Bitcoin to capture an increasing market share within the crypto ecosystem. “Bitcoin now represents 56 % of the total crypto market capitalization, up 15 % compared to last year,” the report states. This growing dominance is driven by strengthened institutional adoption, with major financial sector players, such as ETF (Exchange-Traded Funds), playing a key role in this rise.
The institutional adoption of Bitcoin has been one of the drivers of its growth. In January 2024, U.S. regulators gave the green light to the listing of the first spot Bitcoin ETF, which attracted institutional investors at an unprecedented rate. These ETF now hold around $55 billion worth of assets, further cementing Bitcoin’s position as a must-have asset for wealth managers. Indeed, this institutional success contrasts sharply with previous years, where adoption was mainly driven by individual investors.
Miners in difficulty, but positive long-term prospects
However, this euphoria around Bitcoin does not extend to all players in the ecosystem. Bitcoin miners, in particular, are going through a tough period. The VanEck report highlights that the year 2024 has been “terrible” for miners, notably due to the halving of mining rewards in April. Thus, “Rewards have dropped from 6.25 BTC to 3.125 BTC per block, significantly reducing miners’ profitability,” the report states. This decrease has led to a 97 % drop in the Hashprice index, which measures miners’ revenues.
Despite these challenges, the long-term prospects for Bitcoin remain positive according to VanEck. The report highlights several mega-trends that should continue to support the crypto’s growth: the increasing demand for decentralized networks, growing institutional adoption, and increased state involvement in mining and cross-border trade.
While Bitcoin miners are currently experiencing difficulties, the long-term dynamics clearly lean in favor of a bullish market for the crypto. Rapid institutional adoption, growing sovereign involvement, and the robustness of the Bitcoin infrastructure continue to fuel sustained demand.
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Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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