In the year How will 2024 shape Bitcoin’s institutional growth?

A new analysis from CryptoQuant has determined that 2024 will be a “define year” for institutional bitcoin adoption, especially for exchange-traded funds (ETFs). Corporate investment increased across all sectors, with net capitalization increasing by $300 billion.

However, the report also notes that Bitcoin's technical gains have taken a backseat this year, with institutions completely ignoring protocols like Runes.

ETF wave to Bitcoin

CryptoQuant's latest weekly report, shared with BeInCrypto, tracks institutional adoption growth through 2024. The Bitcoin ETF received SEC approval in January, kicking off the corporate investment frenzy. Since the beginning of the year, Bitcoin's actual capitalization has jumped from $430 billion to $730 billion.

Only the issuers have achieved this capitalization. For example, Bitcoin ETF issuers were buying BTC at five times the global hash rate at the end of October. BlackRock alone holds more than $500,000 in Bitcoin, and the ETF market is booming. Arkham, an on-chain intelligence firm, announced on Wednesday this week that the company had bought $1 billion in Bitcoin.

However, analysts emphasize that Bitcoin ETFs are not the only factor. ETFs provide an easy way for large institutions to gain exposure to Bitcoin, but they also provide a stamp of legitimacy. Major companies are buying Bitcoin themselves, bypassing ETFs entirely.

“Corporate stock increased, with Microstrategy increasing its holdings from 189,000 to 402,000 bitcoins, making it the largest corporate holder. Companies like Marathon Digital have followed suit, increasing institutional interest, reflecting a broader trend of corporations adopting bitcoin as a strategic reserve asset.

Both of these companies, Microstrategy and Marathon, have also led Bitcoin purchases. Earlier this week, the companies spent $1.5 billion and $700 million on the purchase of BTC. The report says these massive purchases have “enhanced Bitcoin's liquidity, stability and integrity.” Exchanges and other industrial companies have benefited a lot from this trend.

The report identifies a number of places where bitcoin could take off with institutions in 2024. However, it's somewhat of a shame that the asset's technical potential has received little attention. The company's Runes protocol helped to attract interest in several sectors, but it had little visible impact on the overall market.

CryptoQuant estimates that some Runes tokens are close to reaching $1 billion in market capitalization this year. However, industry analysts worry that EEFs could unleash a wave of “de-centralization”, turning Bitcoin into a permanent speculative asset.