Bitcoin: Why Has Its Price Skyrocketed In 2024? 

TradingKey - Bitcoin, and cryptocurrencies more broadly, have had an impressive run over the past month. That has been driven by a surge of buying in the run up to, and the aftermath of, the US presidential election.

With Donald Trump getting elected as President of the US for a second time, the price of Bitcoin started to take off. Over the past month, Bitcoin has risen 40% and now trades for just over US$90,000. Meanwhile, so far in 2024, Bitcoin has more than doubled, rising 104% since the beginning of the year.

A lot of the gains over the last month came after the election in early November, with Bitcoin having recorded a 32% price rise since 6 November – when it became clear that Trump would become president.

But why has the price of Bitcoin surged on Trump’s victory? And are there any other catalysts for the huge run-up in Bitcoin’s price so far in 2024? 

Trump: Pro-Bitcoin and pro-crypto President

One of the biggest reasons for the recent rally in Bitcoin has been the election of Trump. That’s mainly down to him being viewed as more “pro-crypto” than his Democratic rival in the election, current Vice President Kamala Harris. The price of Bitcoin surged 8% on news that Trump would emerge victorious from the election.

Indeed, he’s also campaigned to try and get the crypto crowd on his side. Trump made various claims during his election campaign, including saying to cryptocurrency enthusiasts that “with low energy costs, America will become the world’s undisputed Bitcoin mining powerhouse”. He’s

In terms of the mining potential for Bitcoin in the US, he also claimed that “we’ll be having power plant built at the sites. We’ll be using nuclear”. He also said – with regards to the power generation needed for Bitcoin mining – that “we’ll be creating so much electricity that you’ll be saying ‘Please, please, President, we don’t want any more electricity. We can’t stand it! You’ll be begging me, ‘No more electricity, sir’”.

Clearly, that has investors excited about the potential opportunities in the crypto space for America if there was a pro-crypto President in office.

Building up Bitcoin reserves

In Nashville, Tennessee in July, Trump was the keynote speaker of the biggest Bitcoin event of the year – Bitcoin 2024. He said during that speech that if he was elected, he would ensure that the federal government never sells off its Bitcoin holdings. 

The US government has Bitcoin holdings that it has accrued by seizing the assets from financiual criminals. Typically, from time to time, an arm of the US government – the US Marshals Service – will auction off its Bitcoin holdings, as well as other cryptocurrencies like Ethereum and Litecoin, which can cause drops in their prices.

By committing to holding on to its Bitcoin reserves, Trump is giving optimists reason to believe that there won’t be any periodic sales of Bitcoin reserves by the US government when he’s in office.

Institutionalisation of Bitcoin via ETFs

One of the less appreciated factors of what’s been driving the Bitcoin price has been outside the election of Trump. It actually came at the beginning of 2024, when Bitcoin Exchange Traded Funds (ETFs) were approved by the Securities and Exchange Commission (SEC).

On 10 January 2024, the SEC approved the first US-listed ETFs that track the price of Bitcoin. As a result, there were a flurry of Bitcoin ETF offerings, such as BlackRock’s iShares Bitcoin Trust (NASDAQ: IBIT) and the Fidelity Wise Origin Bitcoin Fund (NYSE: FBTC).

With such large and reputable financial institutions launching ETF products that track Bitcoin, the cryptocurrency garnered a lot more attention from institutional investors. Indeed, by permitting Bitcoin ETFs to trade in the US, the SEC played a large part in legitimising the cryptocurrency as a distinct asset class.

Ironically, the Chairman of the SEC currently – Gary Gensler – has traditionally been seen as an anti-crypto regulator. Trump has previously said that he would “fire Gensler on day one” if elected President, given his cautious approach to regulating crypto. As a result, anyone who is chosen by Trump to lead the SEC could be much more “light-touch” in their approach to regulating the crypto industry.

Where does Bitcoin go from here?

While there’s no doubt that the election of Trump has turned out to be a positive factor for the price of Bitcoin, for the short-term momentum to continue in Bitcoin’s favour investors will need to see further positive news. President-elect Trump has already appointed Elon Musk – Tesla’s CEO – to head up the Department of Government Efficiency (DOGE).

That boosted both the price of Tesla stock but also Dogecoin, which Musk has been a fan of. Further pro-crypto moves from the incoming Trump administration could be further catalysts to the Bitcoin rally. Overall, though, more long-term investors will need to start allocating a portion of their portfolio to the cryptocurrency for the rally to be sustainable.