Federal Reserve spoils crypto’s New Year’s party at the end of an excellent 2024

The last two weeks of the year were not the magical moment we hoped for Bitcoin and that was mainly the Federal Reserve’s fault. The Fed’s message also put a Christmas damper on the stock markets. However, we really shouldn’t complain as we look back on a very positive 2024.

Powell

The Fed decided to cut long-term interest rates by a quarter percentage point (which investors had expected), but at the same time warned that they would only do this twice in 2025 (and that was a surprise, investors were expecting four or even six interest rate cuts). Normally the new American President Donald Trump cannot fire the Fed chairman, but with Trump you can never be sure. Jay Powell better watch out in 2025, because Trump doesn’t like it when the stock market goes down.

Bitcoin and crypto therefore took a step back in the past few days and it does not seem plausible that we will end the year with a new all-time high. Yet 2024 will go down in history as a revolutionary year for Bitcoin.

Blackrock

Mostly thanks to ‘uber’-boomer (and CEO of BlackRock) Larry Fink, we got to witness the launch of the Bitcoin ETF funds in the United States at the beginning of the year. As a result, a new generation of investors would participate in crypto. The boomers (born between 1946 and 1964) have a lot of savings and that new money drove the price of Bitcoin significantly higher.

After an initial new high in March ($74,000), we experienced the Bitcoin halving in April, which passed very smoothly and without any hiccup. This was followed by an assassination attempt on Donald Trump in July, which led to a first taste of the so-called Trump trade (aka the direction that investors would choose if the Republican candidate actually won the elections in November). It worked out well for Bitcoin and crypto.

The Japanese Central Bank crashed their own stock market in August, after which Bitcoin also fell below $50,000 for the first time in a long time.

September and October we mostly saw sideways action.

During the night of November 5 to 6, it became clear that Trump would indeed win the US presidential election and Bitcoin started to rise rapidly as a result. November brought an increase of about 40% and a new ATH of $107,000. Veteran Peter Brandt was already forecasting a price of $112,000, but then the Fed arrived and they briefly threw a spanner in the works.

Don’t worry, though. 2025 looks very bright for Bitcoin and crypto right now.