By Terry Ashton, updated December 31, 2024
Bitcoin is the most important cryptocurrency in the world with the highest market capitalization and the most elevated price out of all digital coins. Anytime BTC climbs or loses some of its value, the entire marketplace feels the effects as well, and altcoins follow the same patterns. The Bitcoin price chart is currently showing a stronger bull run than ever before, with the prices climbing to new record-breaking levels. Most investors were expecting 2025 to bring a six-figure price for the first time in BTC history, but the rally that commenced during the first week of November took the trading world by surprise, and propelled the price to $100K almost overnight.
On December 17th, the price briefly reached $108,000 as a result of flash volatility. A snap downturn followed right after, but as of December 24th the price remained far above the $90K support level, showing that the market remains strong.
ETFs
The arrival of the exchange traded funds had been widely anticipated by investors from all over the world due to its potential for growth and development. Since the assets allow investors to trade without owning the coins directly, most analysts believe that they will prove useful in expanding marketplace engagement rates, especially among institutional and retail investors who have the means to bring a lot of capital but are likely to be reluctant about joining the crypto environment due to its reputation as a risky endeavor.
The continued regulatory uncertainty can also be blamed as well, as regulators in the United States are yet undecided when it comes to digital assets. So far, the Securities and Exchange Commission, as well as the Commodity Futures Trading Commission, have taken action against several exchanges and trading platforms, including some of the biggest names in the industry. Individuals associated with the crypto environment are also dealing with charges of fraud, money laundering and tax evasion, with some of them going back almost a decade.
These events don’t directly affect BTC’s performance, but they have an impact on the industry’s image as a whole. The trading environment becomes less appealing for investors who start seeing it as unreliable and choose to take their capital elsewhere. Since the ecosystem is vulnerable to shifts in supply and demand, it only makes sense that the ecosystem will suffer some setbacks. According to analysts, this is the main reason why the launch and rise of ETFs hasn’t yet yielded a bullish market as strong as investors expected.
Retail demand
On December 6th, Bitcoin surpassed the $100K level for the first time in its history. This development wasn’t expected until 2025, as most investors predicted that BTC will reach this figure anywhere between the first and the second quarter of the following year. However, the results of the US presidential elections gave the marketplace a huge boost, allowing digital gold to reach this record-breaking level sooner than anticipated. Although corrections naturally followed right after, recovery was swift.
The momentum remains bullish as a result of the significant trend for the exchange netflows. The negative flows in particular have steadily intensified since October indicating that whales, the investors owning large amounts of capital, are moving their holdings to long-term storage. Their actions have reduced the number of coins present on exchanges, diminishing selling pressure and paving the road for better conditions when it comes to price appreciation. The sustained demand and lowering exchange supply have also contributed to the breach of the $100,000 level.
Moreover, there has been considerable demand from the retail sector. In December 2024, the figures reached their highest level in four years, with market analysts saying that ongoing interest from the sector was behind the demand. Historically, retail engagement has always hinted that a new all-time high is in the making, and indeed BTC managed to climb over $108K. Right now, most believe that the current price movements will kickstart the beginning of an euphoric market phase, as enthusiasm reaches peak levels once more.
Volatility
The beginning of June has been rather volatile for cryptocurrencies as a whole, and Bitcoin’s sturdiness wasn’t enough to keep it safe this time. Digital gold had to deal with sudden and extreme fluctuations before the Wall Street opening and in response to the US employment data. The altcoins didn’t do any better either, something that shouldn’t come as a surprise considering that BTC’s performance influences that of its fellow cryptocurrencies, and when Bitcoin is not doing well, the other tokens are unlikely to have a positive run.
When prices grow, investors get an incentive to start being more active in their trading endeavors once again, but it’s essential to remember that the $100K level has also brought volatility to the trading environment. As a result of growing user activity, flowing capital across all crypto sectors, the emergence of startups, and improved regulatory clarity all over the world, investors must think carefully before commencing transactions. Making the wrong decision can lead to major capital losses.
Bitcoin and gold
The correlation between BTC and gold is well-known to all market participants. According to recent data, BTC will be worth somewhere around 100 oz of gold. While its price will fluctuate over the next twelve to eighteen months, the ultimate surge will see it climb 230% against gold. The numbers derive from long-term historical data showing that crypto has been gaining against Gold since its inception. If the patterns remain consistent, and there’s no reason to believe they won’t, then this is the final outcome.
To think that digital gold will someday be able to surpass actual gold might have seemed unthinkable for some only a few years ago, but it appears that it was actually a realistic prediction. Bitcoin first overtook gold in 2017 and has since managed to remain above even during the lower points of the bear market.
Although Bitcoin is not doing as well as it could right now, many are convinced that it is only a matter of time before the marketplace becomes stronger and begins picking up speed again. In the meantime, make sure to keep your portfolio and current list of holdings secure.