It’s been sixteen years since the launch of the pioneering cryptocurrency – Bitcoin.  

Through its decade and a half’s existence, Bitcoin has been through its fair share of ups and downs. 

Many market sentiments would never have projected the extent of Bitcoin price today but Bitcoin achieved a historical milestone in December of 2024 to scale the $100,000 valuation for the first time in its history.

Unlike previous rallies that were often driven by retail speculation, the current momentum seems to be fueled by a broader mix of factors and understanding what sets this surge apart is key for both seasoned investors and curious newcomers to make informed decisions. 

So let’s explore the unique forces behind this historic climb and what it could mean for the future of the market.

Key Events Behind Bitcoin’s Bullish Movements

For the crypto ecosystem, 2024 was quite the year. A number of dominoes toppled over one another to pull Bitcoin ahead. One that happened earlier in the year was when the SEC (Securities and Exchange Commission) gave the go ahead to allow conventional exchanges to make use of Bitcoin-ETFs in trading. 

This huge news stirred up a lot of institutional interest amongst investors pooling in more enthusiasts to trade Bitcoin like they would any other financial asset. Companies like BlackRock, Greyscale and Fidelity spearheaded this movement to trade these ETFs and  Blackrock alone was said to have acquired around $50 billion in assets by the end of 2024.

The periodic Bitcoin halving also took place. Once the 840,000 block limit was reached, the rewards for mining dropped from 6.25 BTC to 3.125 BTC, reducing the supply of the token and creating an upward pressure on prices. 

But what really put the icing on the cake was the US presidential elections where Donald Trump was reelected. 

Trump is well known for his enthusiasm towards the crypto space and his promises to implement crypto-friendly policies created FOMO that drove daily movement from $2,500 to as much as $5,000, and allowed Bitcoin’s market cap to jump from from $1.3 trillion on November 5 (when he won the election) to over $2 trillion in December.

How This Surge Differs from Past Bull Runs

Spot Bitcoin ETF Impact

The approval of spot Bitcoin ETFs has provided a regulated, accessible way for traditional investors to explore the world of Bitcoin without actually holding any of the asset. This development has increased demand while reducing barriers to mainstream market entry.

Institutional Adoption

The introduction of ETFs has allowed big players like hedge funds, asset managers and even corporations to inject substantial capital boosting Bitcoin’s value, reducing its volatility and attracting a broader investor audience.

Regulatory Standards

Many governments played a big part in bolstering investor confidence in trading Bitcoin last year. In the past, there was a lot of regulatory uncertainty, but last year, we saw the installment of various pro-crypto officials in the US. 

The Securities and Exchange Commission has not only helped to push the use of Spot Bitcoin ETFs but also set clearer guidelines and legal frameworks in key markets to help stabilize investor confidence.

Economic Uncertainty

With ongoing concerns about inflation and economic instability, many investors who have been affected have now begun to shift to Bitcoin as a digital store of their assets to hedge against economic uncertainty.  

The Impact on the Crypto Market

Altcoin Rally

Whenever Bitcoin sees significant bullish patterns, altcoins typically benefit from the overflow. The recent increase has generated fresh interest in prominent altcoins such as Ethereum, Solana, and Cardano, with many of them experiencing considerable gains as investors broaden their crypto holdings.

Enhanced Market Liquidity

The increase in Bitcoin’s value has attracted new investments into the cryptocurrency market, enhancing overall liquidity. This surge of capital frequently results in increased trading volumes and lower price fluctuations among various assets.

Institutional Confidence 

As institutional investors gain exposure to Bitcoin through products like spot ETFs, confidence in the entire asset class grows. This trend has begun extending to other digital assets, encouraging broader market adoption. 

Positive Sentiment and Media Attention 

The surge has reignited mainstream media coverage, drawing new retail investors into the space. This increased visibility often creates a positive feedback loop, driving further demand. 

DeFi and Blockchain Growth

Rising Bitcoin prices have also renewed interest in decentralized finance (DeFi) platforms and blockchain technology, with projects building on Bitcoin and other networks seeing increased activity and development.

Is the Surge Sustainable?

As of the time of writing, Bitcoin has dipped below the $100,000 mark. If this continues there could be a sharp correction that sees Bitcoin on a steady decline. Some experts fear the recent influx of institutional investors could cause an overdependence on spot Bitcoin ETFs to push prices. 

Despite this possibility, the positive sentiments surrounding the token are sure to have an influence on traditional exchanges and the growing confidence among new investors in Bitcoin as a means of digital storage could make the token a staple in many portfolios around the world, which in the long run will see Bitcoin consistently above the $100,000 mark.