- Bitcoin nearly doubled in value while major stocks lagged far behind over the past year.
- Institutional money and new U.S. crypto laws pushed Bitcoin into mainstream economic and political focus.
Bitcoin outpaced traditional stocks by a considerable margin during the past year, gaining 85% from $63,970 on 21 July 2024, reaching a recent high at $123,091 on July 14. Major American stocks as Tesla and Microsoft gained 37% and 21% respectively, and the general market S&P 500 gained merely 14% during the same period.
Donald Trump said during the signing of the GENIUS Act:
I think your stuff has gone up more than any stock or just about more.
Trump credited the change to a departure from the previous administration’s restrictive policy. The digital assets space had been met with significant hostility as recently as a year and a half ago; the criticism appeared focused on Biden administration policies that were uniformly viewed as hostile by the cryptocurrency space.
The GENIUS Act, which supports digital assets and stablecoins, was part of the larger plan under the so-called “Crypto Week.” The legislative actions coincided with increasing investor optimism, signaling that crypto had gained greater political significance in the nation’s capital.
Bitcoin No Longer Just a Retail Game
Recent figures indicate that institutional investors are playing an increasingly significant role within this industry. BlackRock’s Bitcoin ETF has brought in more than $90 billion in assets alone. Bitcoin is now considered by analysts more of a macroeconomic asset, which is influenced by rates and inflation, and not just by hype created by the retail crowd.
Further confidence has also been built through the mature market structure. Volatility has been less in comparison with the past, and the majority are looking at Bitcoin’s appeal through scarcity and the regular inflows into ETFs. This has made the asset more appealing for risk-aware investors looking for longer-term allocations.
At the global level, other governments are following these developments. Several are reported to be considering adopting similar regulatory frameworks for crypto as the U.S. move. This has been something of a catalyst for demand and sentiment within the wide-ranging swath of digital assets, powering the general rally beyond Bitcoin.
Altcoins Join in on the Upside
The rally hasn’t been isolated to Bitcoin. XRP, the third-largest cryptocurrency by market capitalization, has witnessed its price surge by 525% over the last year, rising from around $0.57 to $3.42. BNB and Solana have risen by 29% and 10% annually, respectively.
Part of this movement is driven by the anticipating the overall economic situation. With the moderate rate of inflation and growing speculation with regard to future rate cuts, investors are considering assets that could generate disproportionate gains. Bitcoin, in the midst of the volatility, is an asymmetric upside hedge.
Trump’s growing interest in digital assets has gained an additional political boost. Public statements and policy actions, including regulatory signings for ETFs and executive orders, have reshaped sentiments. The shift has made digital assets previously political outsiders an object of legitimate economic interest.
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