Bitcoin (BTC) has been a standout performer in the financial markets over the past 12 months, with its price surging by 124% since September 2023. This impressive performance has caught the attention of investors and analysts alike, but a recent pullback in the price of BTC has left some investors feeling uneasy.
According to a report by asset manager VanEck, Bitcoin’s market capitalization currently stands at approximately $1.25 trillion, representing 56% of the total cryptocurrency market. This dominance has increased by 15% compared to a year ago, indicating that Bitcoin continues to solidify its position as the leading digital asset.
VanEck expects Bitcoin’s “long term Bull Market” to persist in the coming months, citing factors such as growing adoption as a store of value and a means of transferring wealth. The report highlights the shift in Bitcoin’s adoption from being primarily retail-driven to a more institutional-focused trend, with the approval of spot BTC exchange-traded funds (ETFs) by U.S. regulators playing a significant role in this transition.
Despite the positive outlook for Bitcoin, the report also points out the challenges faced by Bitcoin miners in 2024. The halving event in April, which reduced mining rewards from 6.25 BTC to 3.125 BTC per block, has significantly impacted miners’ profitability. The Bitcoin Hashprice, a key metric for measuring mining profitability, has declined by 97% year-over-year, reflecting the tough conditions faced by miners in the current market environment.
Overall, VanEck’s report paints a mixed picture of the Bitcoin market, with strong price performance and growing institutional adoption on one hand, and challenges for miners on the other. As the cryptocurrency landscape continues to evolve, it will be interesting to see how Bitcoin navigates these challenges and maintains its position as a leading digital asset in the years to come.