Despite setbacks, Bitcoin remains the asset with the best performance levels

Bitcoin is a cryptocurrency and decentralized digital payment system, the first of its kind to appear in the financial world and the blueprint for all the altcoins that followed. Bitcoin is the work of an anonymous creator known as Satoshi Nakamoto, likely a pseudonym that could belong to either a person or a group of people.

On October 31st, 2008, Satoshi Nakamoto released the Bitcoin whitepaper, the original thesis that discussed the basic structure of the BTC network. The document outlined the fact that Bitcoin operates without the means of a standard financial system or centralized authority. This means that BTC doesn’t require the involvement of financial institutions of any kind in order to operate adequately. 

This is one of the features that led many investors to watch to integrate BTC into their portfolios. As such, many have been looking for the best way to buy Bitcoin with bank transfer, the best exchanges they should use, and the strategies that should be part of their trading game plans.

Although BTC is still a relatively new asset class and hasn’t yet fully entered the world of mainstream trading. Many investors and market analysts expect this to become the case in the upcoming years as people become increasingly comfortable with decentralized assets and the blockchain gets increasingly more traction within the corporate world.

Performance 

Over the last few months, Bitcoin hasn’t recorded its most robust performance levels, an unfortunate thing for the investors who were expecting this to be the case and for the king of crypto to continue growing.

Although Bitcoin is definitely stronger than it used to be, considering that it was able to maintain its value levels relatively well over a significant amount of time. When, in the past, it would have been affected by pretty serious price corrections. The most recent data shows that Bitcoin has succeeded in outperforming every single asset class over the past twelve months. 

Although the downward trend that has gripped the marketplace in recent months has got plenty of investors concerned, there is no doubt that Bitcoin remains a popular asset that continues to get plenty of engagement from the trading community.

Spot Bitcoin prices are up 124%, while the market capitalization is approximately $1.25 trillion as of September 20th. This whopping figure is 15% compared to only a year ago and comprises around 56% of the cumulated market cap level of all cryptocurrencies. The current situation Bitcoin is dealing with has been referred to as a “long-term bull market”.

Since, although the prices are not as elevated as they could be during these marketplace movements, Bitcoin is still doing well, and this tendency is expected to continue in the near future. 

Adoption rates 

Cryptocurrencies are fundamentally changeable, a characteristic that doesn’t only apply to altcoins or tokens that have only recently entered the marketplace. Bitcoin is still susceptible to fluctuations and changing trends of many kinds. One of them is the motivation behind BTC adoption, which has changed even compared to the previous year. In the past, much of Bitcoin adoption was the result of retail investments and transactions, a trend that was accelerated by the introduction of inscriptions.

This innovation allowed users to store media files directly on the Bitcoin blockchain through the means of unique tokens known as Ordinals. While many community members weren’t happy with this development and believed that the new asset class would do more harm than good in the Bitcoin ecosystem, others were very happy to welcome this new functionality. However, 2024 diminished the popularity of Ordinals, leading to a year-over-year decline of approximately 52% in transaction fees on the network.

The appreciation BTC has recorded this year could only have occurred if investors become more focused on collecting Bitcoin as money, a way to transfer and store value. In January, regulators officially gave exchange-traded funds the green light, and research shows that this category currently owns approximately $55 billion in net assets.

Bitcoin ETFs have been adopted much faster than any other exchange-traded funds in history, showing that long-term growth prospects remain solid. The fact that decentralized platforms are becoming increasingly important and the increasing involvement in mining and cross-border trading all indicate that the Bitcoin environment will continue to thrive. 

Miners

Bitcoin mining is the process through which specialized devices and software aim to solve cryptographic problems that confirm and verify transactions, as well as create new coins. All the miners who win the competition are awarded cryptocurrency as a way to provide an incentive in order for them to continue participating in this essential process. At the moment, data shows that general miner behavior is positive, with rates at all-time highs. This metric indicates that competition is fierce and that the network is healthy and able to carry on its procedures the way that it should. 

Miners have also started adopting AI initiatives since artificial performance has the ability to provide efficiency, optimize performance rates, and bring fees down so that miners can allocate and manage resources in a more organized fashion. In the aftermath of the halving, many miners were forced to cease all operations in order to avoid losing money as, for many, the venture simply became way too unprofitable. As a result, many are now increasing aggregate BTC holdings. 

Additional features

Institutional adoption levels remain relatively elevated as business investment portfolios that include Bitcoin continue to appear. Digital gold has recorded considerable gains regarding the price, investor sentiment, transfer volumes, and market dominance levels, but network fees and on-chain activity have been decreasing, especially in the retail sector. The US elections and the decisions of regulators appear to provide a positive outlook for the Bitcoin market. So far, as liquidity for the dollar and inflation are generally positive factors for BTC and have led to rallies in the ecosystem in the past. 

Although Bitcoin experienced some drawbacks during the second and third quarters of 2024, most investors remain convinced that the asset is on the right path and that it is only a matter of time before it starts growing undeterred. In fact, many analysts believe that 2025 will finally bring Bitcoin to the six-figure area, with prices having the potential to enter $100K territory or even go beyond that and achieve $150,000.