In 2023 and early 2024, Bitcoin—often referred to colloquially as "digital gold" or affectionately as “the big pie” in some circles—delivered a stunning rally, capturing global investor attention. The leading cryptocurrency surged to an all-time high near 74,000 USD, decisively outperforming skeptics and forcing short sellers to cover at significant losses.
This surge wasn’t just symbolic. Bitcoin’s market capitalization officially surpassed that of silver, positioning it as the eighth-largest asset by market value worldwide. From its early days dismissed as a fringe experiment, Bitcoin has evolved into a recognized store of value and even a legitimate component of diversified investment portfolios.
👉 Discover how market shifts are creating new opportunities for digital asset investors.
Key Drivers Behind Bitcoin’s 2024 Rally
Several fundamental catalysts contributed to Bitcoin’s impressive run in 2024:
- Approval of U.S. Spot Bitcoin ETFs: In January 2024, the U.S. Securities and Exchange Commission (SEC) approved multiple spot Bitcoin exchange-traded funds. This landmark decision opened the floodgates for institutional capital, enhancing liquidity and legitimacy.
- Anticipated Global Monetary Easing: Markets priced in expectations of rate cuts from major central banks, including the Federal Reserve. Lower interest rates typically boost risk assets, and Bitcoin benefited from this macro backdrop.
- Upcoming Halving Event: The next Bitcoin halving, scheduled approximately every four years, reduces block rewards for miners by 50%, historically tightening supply growth. With the event looming, investors positioned early, driving pre-halving accumulation.
These combined forces created a powerful momentum wave, lifting not only Bitcoin but also publicly traded companies holding digital assets. In Hong Kong’s stock market, so-called "Bitcoin概念股" (Bitcoin-related stocks) like Meitu (01357.HK) and Boya Interactive (00434.HK) saw remarkable share price gains, reflecting growing investor confidence in crypto-linked equities.
After the Peak: Signs of Weakness Emerge
Despite its record-breaking climb, Bitcoin began showing signs of exhaustion shortly after hitting its peak.
On March 17, the coin plunged over 6% in a single day, breaking below the 65,000 USD psychological level. Ether (ETH), often seen as the "second pie," fared even worse with a drop nearing 10%.
Such volatility proved devastating for leveraged traders. According to CoinGlass data, nearly 166,200 positions were liquidated across crypto exchanges within 24 hours, with total losses approaching $532 million.
Market analysts point to two primary reasons behind the correction:
- Profit-Taking After Frenzied Gains: After months of relentless upward movement, many investors chose to lock in profits, especially those using margin or futures contracts.
- Shifting Macro Outlook: Rising inflation data in the U.S. reignited concerns about delayed rate cuts. With tighter monetary policy likely to persist, capital rotated out of speculative assets like crypto and back into safer instruments.
Is This a Correction—or the End of the Bull Run?
The sharp pullback has reignited debate among experts about whether this is a healthy technical correction or the beginning of a broader market top.
Gary Gensler, Chair of the U.S. SEC, recently reiterated his long-standing caution toward cryptocurrencies, calling Bitcoin a “highly speculative and volatile asset” and warning investors about systemic risks and fraud within the sector.
Meanwhile, Michael Hartnett, chief investment strategist at Bank of America, observed that current market behavior—especially in tech and digital assets—exhibits classic signs of bubble formation, citing extreme valuations and excessive optimism.
Alex Kuptsikevich, senior market analyst at FxPro, noted:
“New all-time highs often trigger selling. The real question now is whether there are enough buyers at these levels—or if the market will need a deeper retracement before resuming its climb.”
However, not all voices are bearish.
Rachel Lin, CEO of blockchain platform SynFutures, believes that even if a long-overdue correction unfolds in the coming days, the long-term trajectory remains upward due to structural demand drivers.
Similarly, analysts at CITIC Securities highlighted that both gold and Bitcoin rallied strongly in recent weeks—a trend they attribute to rising geopolitical tensions fueling safe-haven demand.
While short-term price action may outpace traditional valuation models, the interplay between ETF inflows, the approaching halving, and macroeconomic uncertainty continues to support bullish sentiment over the medium term—albeit with increased volatility expected.
👉 See how savvy investors navigate high-volatility markets with strategic entry points.
Frequently Asked Questions (FAQ)
Q: What caused Bitcoin’s recent price drop?
A: A combination of profit-taking after record highs, rising leverage in futures markets, and shifting expectations around U.S. interest rate cuts contributed to the sell-off.
Q: How do ETFs impact Bitcoin’s price?
A: Spot Bitcoin ETFs allow traditional investors to gain exposure without holding crypto directly. Institutional inflows through these products increase demand and enhance market credibility.
Q: What is the Bitcoin halving, and why does it matter?
A: Approximately every four years, Bitcoin’s block reward is cut in half, reducing new supply issuance. Historically, halvings have preceded major bull runs due to supply scarcity.
Q: Why did so many traders get liquidated?
A: High leverage amplifies both gains and losses. When prices moved sharply downward, margin calls triggered automatic liquidations on futures platforms.
Q: Could Bitcoin reach new highs again in 2025?
A: Many analysts believe yes—driven by post-halving supply dynamics, continued ETF adoption, and potential monetary easing later in the year.
Q: Is Bitcoin still a good hedge against inflation?
A: While not perfectly correlated, Bitcoin is increasingly viewed as a digital alternative to gold during periods of currency devaluation or economic instability.
Looking Ahead: Volatility Ahead, But Momentum Intact
While the recent correction rattled nerves, it also served as a necessary reset after an extended rally. Sharp drawdowns are common in mature bull markets—especially in asset classes as dynamic as cryptocurrency.
The convergence of ETF adoption, monetary policy shifts, and network fundamentals like halving suggests that underlying demand remains strong. However, investors should prepare for continued volatility and avoid over-leveraging during emotionally charged market swings.
As geopolitical risks persist and digital asset infrastructure matures, Bitcoin's role as both an investment and strategic reserve asset appears more solidified than ever.
👉 Stay ahead of the curve with real-time insights on the next market move.