By Peter Eberle, President and Chief Investment Officer — Castle Funds
Digital finance is a relatively new and ever-evolving field, and within this space, Bitcoin remains the subject of much prediction and speculation. With some recent market fluctuations, many are wondering whether Bitcoin maintains its position as a sound investment.
While the cyclical nature of markets is nothing new, Bitcoin’s decline has some investors concerned. However, many savvy investors know that market fluctuations can also create unique opportunities, such as asset accumulation and market corrections, and that Bitcoin’s enduring qualities allow it to hold its value in an ever-changing market.
Here, we look at what will happen with Bitcoin in 2024 and why it is still a great investment option.
Bitcoin in 2024
Bitcoin has been a strong player in digital finance since its inception in 2009 Bitcoin was the first cryptocurrency to be created and is arguably the most well-known to this day. Its 15-year history is a study in the ups and downs of the digital marketplace. After the bankruptcy of leading cryptocurrency exchange FTX in 2022, many feared that Bitcoin was dead.
Nonetheless, Bitcoin continued to maintain its position as a powerful player in the cryptocurrency space throughout 2024. For example, in March of this year, Bitcoin established a New intraday trading record as it broke through the $69,000 level, peaking at $73,000 before declining.
But what goes up must come down, especially in the financial sector. On August 5, bitcoin was trading below $50,000.
This wild fluctuation in value may have given some investors food for thought, especially since these fluctuations were accompanied by new regulatory developments and broader economic uncertainty. In January 2024, the SEC approved eleven new spot Bitcoin ETFswhich benefited from the backing of financial giants such as Blackrock and increased legitimacy for Bitcoin as a whole. While the excitement surrounding the new Bitcoin spot ETFs led to a price increase, the excitement seemed to quickly fade and prices fell.
Bitcoin’s performance in 2024 has been primarily defined by a maturing digital market, increased regulation of global financial institutions, and the expected ups and downs that accompany most markets, digital or traditional.
Why Bitcoin Remains a Good Bet
Despite the market fluctuations, there are still many reasons to consider investing in Bitcoin. One of its most attractive features, decentralization, remains intact.
Unlike traditional currencies, Bitcoin’s peer-to-peer network is still largely resistant to government censorship and inflation. Bitcoin’s transaction structure ensures security and transparency, which many investors consider to be the currency’s most positive attribute.
Bitcoin’s limited supply is also appealing. It is capped at 21 million coins, allowing for the exploitation of scarcity to its advantage. Like precious metals such as gold or silver, Bitcoin has a store of value due to its scarcity. While demand will continue to increase, its availability will remain static, allowing Bitcoin’s value to increase. As more institutions adopt Bitcoin and legitimize its use, the value of the digital currency can only increase.
Additionally, Bitcoin has experienced increased adoption by several well-known companies and institutions, such as Square and PayPal. These adoptions lend credibility to the currency, strengthening its legitimacy among investors.
Bitcoin’s volatility is also attractive to investors concerned about the risks of relying on a very small number of stocks (like the “Magnificent Seven”) to provide the bulk of their investment returns.
Inflation has raised concerns in recent years as it has reached records. Despite price fluctuations, Bitcoin remains a inflation hedge — so much so that many have called it “digital gold.” Many have turned to Bitcoin investment to protect their wealth in these uncertain economic times.
Finally, the increased regulation associated with the new Bitcoin spot ETFs has given investors a sense of increased security in the digital investment environment. As governments and financial institutions continue to create better frameworks around cryptocurrencies, the risk of fraud and market manipulation is diminishing.
Bitcoin has many unique features that make it a safe bet. The decentralized and secure nature of the digital currency continues to make it attractive to investors looking for non-traditional investment options. Markets, both digital and traditional, will continue to fluctuate – that’s the nature of the investment landscape.
As more people turn to Bitcoin as an investment option, price fluctuations will simply be considered a normal part of the course of events. The future of Bitcoin investing remains bright, with continued opportunities for people looking for investment options with almost unlimited potential and resilience.
– Pierre EberlePresident and CIO of Castle FundsCastle Funds is an investment company that has been managing funds invested in Bitcoin and other digital currencies since 2017. Castle Funds offers secure, liquid and low-cost access to Bitcoin and other digital currencies. They manage active portfolios in the spot, futures and options markets. Castle Funds also develops its own software systems that manage all aspects of their fund operations.
