Bitcoin was the best investment of 2024, but not without its usual volatility

Bitcoin was the best-performing asset class ever in 2024, as new ETFs heralded more widespread adoption and hopes of deregulation under a new presidential administration lifted the digital asset to record levels.

But owning cryptocurrency also came with unpredictability and dizzying volatility, as this month’s trading clearly demonstrates. Bitcoin Its price has doubled since the beginning of the year in the $40,000 range, with it last trading near $95,500. ether It has gained nearly 50% year to date, most recently trading at around $3,400.

The most prosperous period of the year occurred in the weeks following the US presidential election. By mid-December, the cryptocurrency had risen above $108,000 for the first time, driven by optimism that President-elect Donald Trump’s victory over Vice President Kamala Harris would pay off. Opening the door to more organization Clarity and sending new money flowing into the sector.

But since then, prices have fallen. Bitcoin is negative this month, affected by expectations that… Interest rate cuts by the Federal Reserve It will be rolled out at a slower pace than expected. The market also faced a period of profit-taking and pronounced volatility until the end of the year.

The year began with a strong boost in confidence following the launch in January of new ETFs containing the cryptocurrency. The funds, which asset managers offer as a simpler way for investors to access Bitcoin, have attracted tens of billions of dollars in cash this year. the iShares Bitcoin Trust ETF (IBIT) It now has more than $50 billion in assets.

Ethereum ETFs Join the excitement in July. Demand for these funds has not been as strong as their Bitcoin counterparts, but the category still attracted more than $2 billion in net inflows in less than six months, according to FactSet.

Strong crypto winds also lifted connected stocks to record levels. Bitcoin proxy The precise strategy It has risen by 388% since the beginning of the year Coinbase and Robinhood Its shares rose by about 47% and 200%, respectively. MicroStrategy shares have been rising since mid-December, as has the company It has been added to the Nasdaq 100 index.

However, some mining stocks did not perform well Mara Holding and Riot pads On track for double-digit losses year-to-date. The decline in mining stocks may be a direct result of the Bitcoin halving this year, which… Block rewards reduced. Along with transaction fees, this is one of the most important ways miners make money.

— CNBC’s Jesse Pound contributed reporting