Declared as going to zero by many in the wake of the collapse of FTX Exchange in fall 2022, Bitcoin is still going strong in 2024. Though it dropped all the way down to around $15k USD per BTC during the FTX aftermath, the king of crypto has rebounded greatly since then and is trading at over $40k USD after having hit $48k in the lead up to the first approval of spot Bitcoin ETFs. Those ETFs are just one reason that BTC looks stronger than ever, and we’re going to discuss it along with four other reasons to be bullish on Bitcoin.
Spot Bitcoin ETFs Approved
The SEC finally approved 11 spot Bitcoin ETFs after months of delaying their decisions. Though Bitcoin didn’t go to the moon upon the opening of the markets the next day, there is certainly nothing to be worried about as approval was likely already priced in. These ETFs provide a way for more traditional investors to gain exposure to Bitcoin without having to learn the basics of crypto custody. Though this is convenient they could certainly save on management fees by holding their own Bitcoin. Regardless, much like when gold got its ETF, the approval of spot Bitcoin ETFs is extremely bullish for the long term.
What’s most interesting about the approvals is that the SEC claimed it was hacked the day before, when their X (formerly Twitter) posted that they had been approved only to take it down. Bitcoin’s price shot up before the post was taken down. The interesting thing is that there isn’t any evidence that it was a hacker that posted it, and it has brought into question how someone could have gotten access to the SEC’s account so easily. The SEC will now have to answer for any investor misleading this caused as well.
Inflation Still Rampant
Though interest rates are somewhat flattening, the reality is that inflation and increased costs of living are still very real and not going away any time soon. Saving money in fiat currencies like the Canadian dollar, Japanese yen, or any fiat that isn’t one of the big three (Euros, GBP, USD), just feels like a losing battle (if you can save money at all).
This makes investing in something like Bitcoin a more attractive place to store your savings, as it will likely only go up against weaker fiat currencies over time at the very least. This brings us to our next reason that Bitcoin looks stronger than ever.
Recession Safe Haven?
With inflation still high, and the real effects not fully being felt yet, Bitcoin will truly be tested as a safe haven during a recession when it inevitably is declared that we’re in one. Though it may be hard for people to save during a recession, it may be best to keep money in a deflationary store of value like Bitcoin rather than a savings account or other fiat account. How Bitcoin performs if and when a recession is officially announced will certainly be an interesting thing to watch.
Though banks may end up offering high interest rates for savings accounts during this time as a way to encourage saving and reduce spending, there is certainly no guarantee that that rate will still outstrip inflation during the recession. Investors and normal people alike will have to carefully decide where to park the savings they can muster but Bitcoin is fundamentally a good idea.
Deflationary Store of Value
Bitcoin is still a peer-to-peer payment system that can’t be controlled by any one entity. It has the greatest level of decentralization compared to all other digital assets on the market. The Lightning Network helps in reducing transaction speeds and costs, as it can process 1 million transactions per second, with transaction fees being negligible.
Bitcoin is deflationary, meaning that the amount released through mining rewards will diminish over time. This is accomplished through the Bitcoin Halving, which is set to take place in the spring of 2024, and happens about every four years. BTC also has a fixed, unchangeable quantity of 21 million. Couple that figure with the inaccessible Bitcoin that’s been “lost” and there’s only actually about 17 million BTC. This is quite a stark contrast to something like the USD, as its supply has gone from 2 trillion USD just over 10 years ago, to over 10 trillion now.
Bitcoin Network Development
Though there always seems to be excitement about crypto projects’ development, Bitcoin development often seems to fly under the radar. However, the Bitcoin network has continued to be developed even while ecosystems like Ethereum and Solana aim to be the places to do decentralized finance.
One of the more obvious developments has been NFTs on Bitcoin, often known as Ordinals, but there are many variations of these NFTs. These NFTs and memecoins on Bitcoin have often garnered price jumps and created increased demand for transaction processing, which has been increasing network costs of late. Of course, further integration of the Lightning Network with these sorts of transactions will occur and help alleviate the main chain.
There are developers working on decentralized exchanges, lending platforms, and all the other apps you find on networks like Ethereum. Once fully functioning, they could pull adoption towards Bitcoin from other networks.
Closing Thoughts: Still the King of Crypto
For Bitcoin enthusiasts, the approval of spot Bitcoin ETFs has been a long time coming. But the fundamental reasons that many have used to invest in Bitcoin have always remained the same, and they continue to be reasons that BTC continues to show resilience and strength as an asset. What happens to its price over time is anyone’s guess, but it certainly seems here to stay.
