Bitcoin has shown impressive results over the past year, outperforming almost every asset class. However, a recent downturn has spooked some investors, according to a VanEck report released on September 19.
Yearly Performance
Spot Bitcoin prices are up approximately 124% since September 2023, gaining relative share among cryptocurrencies. Bitcoin’s market capitalization is around $1.25 trillion as of September 20, comprising 56% of the total crypto market, up 15% from a year ago.
Factors Driving Growth
VanEck expects Bitcoin’s long-term bull market to continue for the foreseeable future. The reasons for investing in Bitcoin have shifted, now seeing it as a vehicle for storing and transferring value. In January 2024, U.S. regulators authorized the listing of spot Bitcoin ETFs, which quickly became popular among investors.
Current State of Miners
However, Bitcoin miners have had a tough year. The April 'halving' event, which reduced the mining rewards from 6.25 BTC to 3.125 BTC per block, has negatively impacted their revenues. The 'Bitcoin Hashprice,' a unit measuring miners' revenue per one trillion cryptographic hash calculations per second, fell by 97% year-over-year.
Despite the challenges faced by miners, Bitcoin continues to lead the cryptocurrency market due to its growing popularity as an investment tool and store of value.
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