BITCOIN NEWS, ANALYSIS AND FORECAST

The first and most popular cryptocurrency

Bitcoin has the largest nominal market price and capitalization among cryptocurrencies. Due to its increased adoption over time, it ranks alongside Gold, Apple, Nvidia, Microsoft and Google among the top ten global assets by market capitalization.

This is owing to its uniqueness and first-mover advantage, causing investors to classify every other cryptocurrency as alternative coins (altcoins) – Ethereum, Ripple, Solana, Dogecoin, Cardano, etc.

Bitcoin's high volatility

While Satoshi Nakamoto originally invented Bitcoin to serve as a payment system, public sentiments and unclear regulations surrounding cryptocurrencies in several countries have made it highly volatile.

For example, Bitcoin jumped from just under $1 to $29.60 in 2011. However, its price quickly crashed, ending the year near the $5 mark. Between 2012 and 2013, Bitcoin picked up pace again, rising by over 3,000% to $1,121 before slumping nearly 84% to $172 in January 2015.

From 2015 to 2017, Bitcoin surged to $19,600 but eventually lost 83% of its value in the following year. While prices were range-bound in 2019, Bitcoin began a rally post-pandemic, increasing by 1,600% to a high of $68,900 in November 2021. Similarly to previous years, Bitcoin crashed to $16,000 in November 2022, picking up pace again in 2023 and eventually skyrocketing to a new all-time high of $108,353 in 2024.

Bitcoin's charge above the $100,000 milestone was largely fueled by the launch of Bitcoin exchange-traded funds, exposing it to a wide range of top institutional asset managers, including BlackRock and Fidelity.

This volatile history has made Bitcoin attractive among traders who speculate on its price using various fundamental and technical analysis indicators. Additionally, Bitcoin's deflationary features, including a halving mechanism and supply cap of 21 million BTC, have attracted investors leveraging it to store value and hedge against inflation. Hence, Bitcoin is considered ''digital Gold'' among its core enthusiasts.

Bitcoin mining

Mining is the process through which transactions are validated and new Bitcoin tokens are created on the Bitcoin network. The process, also known as Proof-of-Work, involves entities known as miners competing to solve a cryptographic problem using computing power.

The first miner to solve the problem earns the right to validate and add new transactions to the Bitcoin blockchain. In turn, the miner receives rewards in newly minted Bitcoin tokens for completing this task.

In the early days of Bitcoin, anyone could use a personal computer to engage in mining. However, as Bitcoin's popularity grew, mining became highly attractive to most users, increasing competition and thus the difficulty of the cryptographic problems miners must solve.

To gain an advantage, most miners began using high-performance computing devices, such as application-specific integrated circuits (ASICs), designed specifically for Bitcoin mining. Additionally, they pooled their resources together through mining pools.

Bitcoin futures are contracts that enable traders to speculate on the price of Bitcoin without owning the underlying asset. Similar to other futures products, these contracts obligate investors to buy or sell Bitcoin for a predetermined price at a specific date.

With Bitcoin futures, investors can hedge their risks, profit from both price appreciation or decline, and access leverage to amplify their positions. Due to the difference in market liquidity and volume, the price of Bitcoin futures often trades at a premium or discount to its spot counterpart. As a result, exchanges leverage funding rates/fees to maintain parity in both markets.

When traders hold onto their positions for a long time, the aggregated funding fees incurred could affect the profitability of their investments.

Traders can access Bitcoin futures across top crypto exchanges, including the Chicago Mercantile Exchange (CME), which is the largest Bitcoin futures market.