Macro Report on the Crypto Market: The Rise of Strategic Reserves, BTC Breaking $100,000, and the US’s Crypto-Friendly Policies on Bitcoin’s Future!
By the end of 2024, Bitcoin (BTC) has reached a major milestone, breaking the $100,000 mark for the first time. This achievement not only marks a pivotal moment in the history of crypto but also reflects the broader global economic and policy shifts.
The rise of Bitcoin signifies the transition of a once-niche asset class into the global mainstream, garnering attention from investors worldwide. This report provides a comprehensive analysis of the factors driving Bitcoin’s surge to $100,000, including macroeconomic conditions, technological developments, institutional involvement, and supportive policies, particularly from the US.
Additionally, the report explores Bitcoin’s emerging role as a strategic reserve asset and the potential risks and challenges it faces moving forward.
Background & Current Situation
🔹Bitcoin’s Historic Milestone: Significance and Implications
Since the launch of Bitcoin by Satoshi Nakamoto in 2009, this revolutionary digital currency has transformed the financial landscape. From its humble beginnings to surpassing $100,000 in 2024, Bitcoin’s evolution highlights its transition from an experimental project to a mainstream financial asset. This price surge is the culmination of a confluence of factors, including changes in the macroeconomic environment, increased institutional interest, advancements in blockchain technology, and regulatory support, especially from the US government.
Breaking the $100,000 barrier is not just a financial milestone but also a sign of Bitcoin’s broader strategic role in the global economy. This price surge is linked to geopolitical dynamics, global economic competition, and technological advancements, solidifying Bitcoin’s position as more than just an investment asset but a key player in the financial system.
In 2024, Bitcoin’s price surpassed $100,000, marking a breakthrough of both psychological and technical significance. This price level had long acted as a resistance point, and surpassing it demonstrates a surge in investor confidence. The rally from late 2023 into early 2024 has been fueled by global economic uncertainty, institutional adoption, and favorable regulatory shifts in major economies like the US. These developments have firmly positioned Bitcoin as a key component of the global financial ecosystem, shifting it from a speculative asset to a strategic one.
🔹 US Crypto Policy Shift: A New Era of Opportunity and Challenges
Over recent years, the US has gradually adjusted its stance on cryptocurrency, evolving from initial uncertainty and contradictory approaches to a more open and supportive regulatory environment. In 2024, the US introduced the “Digital Assets Framework Act,” providing clearer legal guidelines for the trading, holding, and taxation of cryptocurrencies. This policy shift has been instrumental in solidifying Bitcoin’s position in the market, positioning the US as a leader in the global digital economy and supporting Bitcoin’s ascent. The US government’s embrace of Bitcoin as a strategic reserve asset further strengthens this trend, laying the foundation for continued growth.
🔹Core Drivers Behind Bitcoin’s Breakthrough of $100,000
Several factors have driven Bitcoin’s rise to $100,000, from macroeconomic conditions to technological innovations and policy shifts. Below are the key drivers behind this milestone:
Macroeconomic Environment: Safe-Haven Demand Amid Uncertainty
🔹Inflation and the Decline of the US Dollar
In the wake of the 2020 COVID-19 pandemic, central banks worldwide implemented aggressive quantitative easing policies, leading to a surge in money supply and contributing to rising inflation. The US dollar, in particular, has seen a decline in its real purchasing power. In this environment, Bitcoin’s fixed supply has made it an attractive hedge against inflation.
Prominent institutional investors, such as Bridgewater Associates, have recognized Bitcoin as a “digital gold” alternative, offering protection from inflation. The International Monetary Fund (IMF) reported that global inflation reached 5.8% in 2023, the highest in a decade. Bitcoin’s scarcity and anti-inflation characteristics have positioned it as a valuable alternative asset.
🔹Geopolitical Instability
Geopolitical instability has also fueled demand for Bitcoin. Conflicts such as the Russia-Ukraine war and the US-China trade tensions have led investors to seek decentralized, non-state-controlled assets. Bitcoin, with its borderless nature, fits the bill as a safe haven, especially in regions affected by geopolitical uncertainty.
🔹 The Challenge to Dollar Dominance
Although the US dollar remains the world’s primary reserve currency, its long-term depreciation has led some countries to explore alternatives. Bitcoin, with its decentralized and censorship-resistant features, is increasingly seen as a viable option for diversification. Countries such as El Salvador and some Middle Eastern nations have begun incorporating Bitcoin into their reserve strategies, further challenging the dollar’s hegemony.
🔹Technological Advancements and the Expansion of Bitcoin’s Ecosystem
Upgrades and Efficiency Improvements
Technological advancements, such as the Taproot upgrade and the Lightning Network, have significantly improved Bitcoin’s functionality. Taproot has enhanced privacy and smart contract capabilities, while the Lightning Network enables faster, more cost-efficient transactions. These upgrades have expanded Bitcoin’s use cases, making it a viable medium of exchange as well as a store of value.
🔹Integration with Web3 and DeFi
Bitcoin is also benefiting from the rapid development of Web3 and decentralized finance (DeFi) ecosystems. It is increasingly used as collateral in DeFi protocols and serves as an important asset bridge in cross-chain transactions. This expanded utility has increased demand for Bitcoin across various sectors.
🔹Bitcoin ETFs and Institutional Support
The US’s approval of a Bitcoin spot ETF has provided a new avenue for both institutional and retail investors to gain exposure to Bitcoin. Major asset managers, including BlackRock and Grayscale, have attracted billions of dollars into the market, providing substantial support for Bitcoin’s price surge.
🔹Corporate Adoption A Catalyst for Growth
Corporations such as Tesla and MicroStrategy have not only added Bitcoin to their balance sheets but have also publicly endorsed it as a strategic asset. These high-profile moves have increased Bitcoin’s credibility and appeal among institutional investors.
The US government’s shift toward a crypto-friendly regulatory environment has played a crucial role in Bitcoin’s rise. Clearer regulations have reduced uncertainty for investors and facilitated broader participation from institutional players.
🔹US’s Crypto-Friendly Policies: Long-Term Implications for Bitcoin
In 2024, the US implemented a series of policies that have bolstered Bitcoin’s mainstream adoption and strengthened its position in the global financial system.
🔹Tax Incentives and Investment Encouragement
The US introduced tax incentives for long-term Bitcoin holdings, including a 50% capital gains tax reduction for assets held for over three years. This policy is designed to encourage long-term investment and stabilize the market.The US government has invested billions in blockchain infrastructure, including green energy mining projects and digital asset data centers. These investments help enhance Bitcoin’s security and sustainability, fostering greater confidence among investors.
🔹Regulatory Clarity & BTC as a Reserve Asset
The “Digital Assets Framework Act” has clarified Bitcoin’s legal status, reducing regulatory ambiguity and opening the door for more investment and innovation in the space. As Bitcoin continues its ascent, it is increasingly seen as a viable global strategic reser.ve asset. This shift is driven by market dynamics as well as broader economic and geopolitical trends.
🔹 Bitcoin as Digital Gold & National Adoptions
Bitcoin’s fixed supply of 21 million coins has positioned it as a scarce and valuable asset, similar to gold. Amid global economic uncertainty, Bitcoin’s anti-inflation properties make it an appealing store of value. Central banks have slowed their accumulation of gold in favor of Bitcoin, which is seen as a more modern and liquid alternative.
Since El Salvador’s adoption of Bitcoin as legal tender, other countries are exploring similar models, further legitimizing Bitcoin’s role as a reserve asset.
🔹 What's the future with BTC?
Time will tell but as the ETF landscape continues to increase its holdings along with institutions, the sky is the limit. Make sure to stay in the loop with the latest developments in HTX and the crypto world by joining our social community channels.
