The Extraordinary Year When Bitcoin Went Mainstream

History will remember 2024 as the year Bitcoin transformed from a niche investment to a mainstream asset. With the dollar exchange rate breaking through the symbolic $100,000 mark and the world’s largest financial firms pursuing a Bitcoin strategy, the orange coin can no longer be dismissed. You can still think whatever you want about Bitcoin, you just can’t ignore it.

The new year promises many exciting opportunities such as adoption at the highest levels of government, expanding use of Bitcoin as an institutional treasury asset, a regulatory overhaul to make the US more friendly to financial innovation, and geopolitical dynamics that are pushing Bitcoin in a new direction drive epoch.

A regulatory turning point

In January, the US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs – a moment likely to be seen as a turning point in financial history. For years, the SEC opposed Bitcoin ETFs, citing concerns about market manipulation and investor protection. The approval marked a key shift in the agency’s stance, bringing billions of dollars of liquidity to the market and increasing confidence in Bitcoin as a legitimate asset class. Its launch was the most successful in the history of ETFs and now manages more assets than gold ETFs.

These ETFs have created an open door for new sources of liquidity to enter the Bitcoin markets, as certain pools of capital cannot be converted into physical Bitcoins, but rather regulated financial products such as ETFs can be purchased. Perhaps more crucially, Bitcoin ETFs have normalized Bitcoin as an investment. Pension funds, retirement accounts and institutional portfolios – and the financial advisors who manage them – now have the ability to gain Bitcoin exposure as easily as stocks, bonds and other instruments.

Is lower volatility in store for 2025?

Bitcoin’s institutional adoption reached unprecedented levels in 2024. BNY Mellon, America’s oldest bank, received SEC approval to offer Bitcoin custody services, a move that signals that even the most conservative institutions are now recognizing Bitcoin’s staying power.

Meanwhile, BlackRock, the world’s largest asset manager, has received approval for the iShares Bitcoin Trust to offer spot Bitcoin ETF options. This paved the way for more efficient price discovery, which could dampen price volatility in 2025.

Although volatility is not inherently bad, it does prevent certain types of investors from entering the market. A significant reduction in volatility can in turn lead to greater confidence in the asset, leading to even more inflows and therefore more price discovery, further dampening of volatility, etc., thus starting a virtuous cycle of adoption and appreciation of Bitcoin as an asset class sets.

Corporate pioneers are leading the charge

Bitcoin’s mainstream moment has also been driven by visionary business leaders. MicroStrategy, already known as a Bitcoin pioneer, announced a bold plan to raise $42 billion over three years to expand its Bitcoin holdings. Since this announcement, the company has already filed additional documents with the SEC to issue even more shares and purchase even more Bitcoin. Microstrategy’s treasury operations are a fascinating financial innovation that will be explored in the coming years.

Inspired by MicroStrategy’s leadership, a handful of other companies followed suit in 2024, including Semler Scientific, Metaplanet, and others. In fact, just in the last few days, new filings with the SEC reveal that several new Bitcoin ETFs are on the horizon:

• Bitwise filed for a so-called “Bitcoin Standard Corporations” ETF that would contain stocks of companies that hold Bitcoin in their treasuries.
• Strive Asset Management, a company closely linked to Vivek Ramaswamy, has filed for a “Bitcoin Bond” ETF aimed at providing exposure to MicroStrategy’s convertible bonds.
• Following a similar approach, the REX Shares Bitcoin Corporate Treasury Convertible Bond ETF would invest in convertible bonds issued by companies that hold Bitcoin on their balance sheets.
• ProShares applied for a hedged ETF that would “strategically pair long positions in stocks or gold with short positions in the U.S. dollar, complemented by long positions in Bitcoin via futures contracts.”

A pro-Bitcoin administration

There’s no other way to put it: In one of the most contentious presidential elections in U.S. history, Americans elected a pro-Bitcoin president in a landslide. On his way to reclaiming the White House, Donald Trump openly expressed his support for Bitcoin and even gave a historic keynote speech at the Bitcoin conference in Nashville.

Key members of the Trump administration have expressed support for Bitcoin, including RFK Jr., Tulsi Gabbard, Don Jr., Vivek Ramaswamy, and others. At the same time, Congress is also coming into play, with US Senator Cynthia Lummis supporting a proposal to create a Bitcoin Strategic Reserve (SBR).

An SBR would position the United States as a global leader in sound money, using Bitcoin as both a hedge and an asset of geopolitical importance – and could even help restore the separation of powers within the federal government…