Bitcoin (BTC) has witnessed a capital explosion with approximately 450 billion USD added since November 2022, now reaching a total actual capitalization of 850 billion USD, according to the latest report from Glassnode. This increase reflects not only the appeal of Bitcoin in the investment community but also affirms its position as a macro asset with global influence.
Important Milestone in Bitcoin History
Bitcoin, the pioneering cryptocurrency on the market, has achieved a remarkable milestone by maintaining its value above 100,000 USD for an extended period. This event not only resonates in the investment community but also affirms Bitcoin's status as an important financial asset in the context of the increasingly developing digital economy.
Looking back at history, just seven years ago, Bitcoin first hit the 10,000 USD mark during a remarkable price surge in 2017. This was a major turning point for the currency, marking the beginning of increasing recognition of cryptocurrency among investors. After ups and downs and fluctuations, Bitcoin has proven its resilience, with strong growth attracting attention from both individual and institutional investors.
The price mark of 100,000 USD not only signifies a new value milestone but also reflects the transformation of the cryptocurrency market. In this context, Bitcoin has established a solid foundation, supported by the increase in cryptocurrency adoption in the payment features of major enterprises, as well as interest from large investment funds. The presence of corporate and large institutional investment funds has boosted confidence in Bitcoin's potential as a long-term store of value.
Moreover, the recent price stability of Bitcoin has attracted strong interest from traditional investors seeking new assets amid rising inflation and global economic instability. Bitcoin's emergence as a reserve asset akin to gold over the past years has opened a new chapter in investment trends.
While Bitcoin continues to grow, the rivalry among other cryptocurrencies is also intensifying, creating a dynamic and controversial financial market. Despite challenges from competition, regulation, and policies, Bitcoin remains firmly positioned as the 'king' of cryptocurrencies.
Looking to the future, the cryptocurrency market is expected to experience many fluctuations but also promises to open up many new investment opportunities. The attention from investors and financial institutions towards Bitcoin will continue to be a significant driving force for the growth of this cryptocurrency. Investors, whether new or seasoned, should monitor these developments to seize potential opportunities in this vibrant field.
Bitcoin maintaining a price above 100,000 USD is not only a historical milestone but also a testament to progress and change in the modern financial market.
Strengthening position
According to Glassnode, the growth of Bitcoin's actual capitalization is proof of the increasing importance of this currency in the global financial market. In particular, Bitcoin has attracted attention from many major financial institutions and governments. Many countries have shown interest in Bitcoin, from Bhutan with large-scale mining activities to El Salvador, where Bitcoin is recognized as legal tender. The USA is also exploring the potential of Bitcoin as a strategic reserve asset.
Despite ongoing debates about Bitcoin's intrinsic value and usability, it has affirmed its position as one of the world's leading financial assets. With a market capitalization of 1.932 trillion USD, Bitcoin has surpassed silver (1.800 trillion USD), Saudi Aramco (1.800 trillion USD), and Meta (1.700 trillion USD).
Growth of strength and market demand
The value of Bitcoin continues to rise; however, the market is also demanding a larger amount of capital to sustain this growth. The Realized Cap index tracks the total accumulated net capital flow, reflecting the continuous expansion of Bitcoin in the digital asset ecosystem.
Bitcoin is not only a pure investment asset but also serves as an effective decentralized payment system. Over the past year, the Bitcoin network has processed an average of 8.7 billion USD in transactions daily, raising the total transaction volume to 3.200 trillion USD. These figures are clear evidence that Bitcoin has real value and remains appealing.
Capital flow and investment trends
Since the collapse of FTX in November 2022, Bitcoin has significantly expanded its dominance in the digital asset world, with market share increasing from 38% to 59%. The market capitalization of Bitcoin has increased 5.3 times, from 363 billion USD to 1.930 trillion USD, while the altcoin market also experienced a boom with a 4.7 times increase.
Despite the correlation between Bitcoin and altcoins, BTC remains the top choice attracting new capital flow, further reinforced by the emergence of spot Bitcoin ETF funds in the USA. Bitcoin is now considered an essential asset in the investment portfolios of institutional investors, especially due to its scarcity and its increasingly significant role as a hedge against the depreciation of fiat currency.
Changes in investment behavior
However, despite the growing interest from institutions and countries, the reality shows that investment demand for Bitcoin has not yet reached the levels seen in previous cycles. New capital flow into Bitcoin currently appears in waves rather than continuously, reflecting a change in investor behavior.
Glassnode has indicated that the number of retail investors participating in the market is decreasing compared to the peak in 2021. In contrast to this trend, large institutions are actively increasing their holdings. While the current market is in favorable conditions, the search for Bitcoin on Google has not reached the high levels seen in 2021. The investor structure is also undergoing significant changes, with retail investors shifting to long-term accumulation strategies rather than just short-term speculation.
Impact of Bitcoin ETF funds
The emergence of spot Bitcoin ETF funds in the USA has created a good opportunity for financial institutions to access Bitcoin more easily. Just one year after their launch, these funds have attracted over 40 billion USD in net capital flow, with total assets under management exceeding 120 billion USD. These funds not only generate new capital flow but also further strengthen confidence in Bitcoin as a sustainable valuable asset.
Reports also indicate that the Bitcoin investor community is currently more resilient to market fluctuations. In this cycle, the actual losses of investors are significantly lower than in previous cycles. One notable event in recent times was the market volatility related to the carry trade of the Yen on August 5, 2024.
More stable market structure
Unlike previous cycles, which witnessed sharp volatility from unexpected events, the price of Bitcoin at this stage is showing a more stable trend. Price increases have been replaced by accumulation phases, creating a more robust market structure. The growing participation of institutional investors plays a crucial role in minimizing excessive volatility in the market.
