Table of contents

Content Page

1. Executive summary 2

2. Introduction/background 2

3. Information about the selected cryptocurrency 3

4. Historical data and company performance 4

5. Analysis and trend of data 5

6. Market performance and competitiveness in the markets 6

7. Future prospects and any recommendation 7

8. Final conclusion 8

References 9-10

Appendix 11-12

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1. Executive summary
Cryptocurrencies represent a transformative shift in the global financial landscape, characterized
by their decentralized nature and reliance on blockchain technology. This report aims to provide
an overview of cryptocurrencies, their significance, and the role they play in contemporary
finance.The primary purpose of this report is to educate the finance team about cryptocurrencies,
focusing on their underlying technology,blockchain and examining a specific cryptocurrency,
Bitcoin. By exploring these elements, the report seeks to clarify how cryptocurrencies function,
their potential benefits and risks, and their implications for businesses and investors.(Härdle et
al., 2019)

2. Introduction/background
Cryptocurrency represents a transformative shift in the way we perceive and utilize money,
emerging as a decentralized alternative to traditional fiat currencies. The concept was first
brought to life with Bitcoin, introduced in 2009 by an anonymous entity known as Satoshi
Nakamoto. Unlike conventional currencies that are regulated by governments and central banks,
cryptocurrencies operate on blockchain technology, which ensures secure and transparent
transactions without the need for intermediaries. This decentralized nature allows users to engage
in peer-to-peer transactions, enhancing financial autonomy and reducing reliance on traditional
banking systems.(Redirecting, n.d.)

Blockchain is a distributed ledger technology that records transactions across a network of

computers, forming a chain that secures data and prevents fraud. Cryptocurrencies, beyond
financial transactions, introduce new economic models and opportunities for innovation. Their
rise has sparked interest in applications like smart contracts and decentralized finance,
emphasizing their importance in the modern economy. Understanding their mechanisms and
implications is crucial for navigating the future of finance.(Shrivastava et al., n.d.)

This report aims to explore the foundational technology of blockchain, which underpins Bitcoin's
functionality by ensuring secure, transparent transactions without the need for intermediaries.
The scope of the study includes a comprehensive examination of Bitcoin’s features, such as its
mining process, transaction validation, and the Lightning Network, a second-layer solution
designed to enhance transaction speed and reduce costs. Additionally, the report will assess
Bitcoin's historical performance, market trends, and competitive positioning within the
cryptocurrency landscape.

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3. Information about the selected cryptocurrency
Bitcoin (BTC) is the first and most widely recognized cryptocurrency, created in 2009 by an
anonymous entity known as Satoshi Nakamoto. It operates as a decentralized digital currency,
allowing users to send and receive payments directly without intermediaries like banks. Bitcoin
transactions are recorded on a public ledger called the blockchain, which ensures transparency
and security. Bitcoin transactions are facilitated through a technology called blockchain, which is
a distributed ledger that records all transactions across a network of computers. Each transaction
is grouped into blocks, which are then linked chronologically to form a chain. This structure
ensures transparency and security, as altering any block would require consensus from the
majority of network participants.(Pernice & Scott, 2021)

The Lightning Network is a second-layer protocol built on the Bitcoin blockchain to improve
transaction speed and scalability. It enables off-chain transactions outside the main blockchain,
enabling faster and cheaper payments. Payment channels between two parties lock Bitcoin in a
multi-signature address, recording each transaction on the main blockchain. Once closed, only
the final balances are recorded on the main blockchain, reducing congestion and allowing high
transaction throughput..(Lin et al., 2022)

Transactions on the Lightning Network are processed almost instantaneously, providing a

seamless user experience compared to Bitcoin’s average confirmation time of around 10 minutes.
Fees on the Lightning Network are minimal, often just a fraction of a cent making it
economically viable for small transactions or microtransactions. The Lightning Network can
theoretically handle millions of transactions per second, vastly exceeding the capabilities of the
Bitcoin mainchain.(Lin et al., 2022)

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4. Historical data and company performance

Bitcoin, created in 2009 by the pseudonymous Satoshi Nakamoto, has undergone a remarkable
evolution, marked by significant price fluctuations and transformative events. Initially valued at
virtually nothing, Bitcoin's price reached $1 for the first time in 2011 and surged to over $1,000
by late 2013. The cryptocurrency gained mainstream attention in 2017, when its price
skyrocketed to nearly $20,000, leading to increased adoption and speculation. However, this was
followed by a sharp decline in 2018 due to regulatory pressures and market corrections, causing
it to drop below $4,000.(Shrivastava et al., n.d.)

In subsequent years, Bitcoin's performance continued to be volatile. The introduction of Bitcoin

futures in December 2017 marked a pivotal moment for institutional interest. By 2020, Bitcoin
experienced another surge, reaching an all-time high of approximately $69,000 in November
2021 as major companies began accepting it as payment and El Salvador adopted it as legal
tender. However, the market faced significant challenges in 2022, with prices plummeting to
around $15,731 amid broader market downturns.(Wikipedia contributors, 2024)

Bitcoin's resilience has been notable, rebounding in 2023 and reaching an all-time high of
$73,794 in March 2024. With a market capitalization of $2.08 trillion, it accounts for 57.3% of
the total cryptocurrency market. Its decentralized nature and fixed supply of 21 million coins
make it a leading digital asset. The Lightning Network aims to enhance scalability and
transaction speed..(Wikipedia contributors, 2024)

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5. Analysis and trend of data
Bitcoin (BTC) is currently trading at $68,041, a slight increase of 0.93% for the day. The
cryptocurrency has shown resilience, bouncing back from a low of $67,149.24 and approaching a
high of $68,381. Resistance is at approximately $68,500, with a breakout above this level
potentially leading to a rally. Support is identified at around $65,300. Bitcoin has gained 10.82%
over the past week, indicating strong upward momentum. Factors contributing to this price
action include the inflow into U.S. spot Bitcoin ETFs, rising gold prices, and increases in the M2
money supply. Analysts suggest Bitcoin is forming a bullish flag pattern, with Elliott Wave
analysis suggesting a corrective phase for another upward impulse. (Achieving Financial
Inclusion Through Digital Currencies, n.d.)

The analysis of Bitcoin and cryptocurrencies reveals a transformative impact on the financial
sector, characterized by decentralization, reduced transaction costs, and enhanced accessibility.
Bitcoin, as the pioneering cryptocurrency, has established a framework that empowers users to
conduct peer-to-peer transactions without intermediaries, challenging traditional banking
systems. This shift towards decentralization not only reduces dependence on banks but also
lowers transaction fees, making financial services more accessible to a broader audience,
including the unbanked population globally.(Redirecting, n.d.)

Key drivers of change in the cryptocurrency landscape include technological advancements and
regulatory developments. The rise of Bitcoin and other cryptocurrencies has prompted traditional
banks to reconsider their roles, with some institutions exploring ways to integrate digital assets
into their service offerings. For instance, banks are beginning to provide custody services for
cryptocurrencies and are leveraging blockchain technology to enhance payment processing
efficiency. This integration could streamline operations and reduce costs associated with
traditional banking practices.(England, 2023)

Furthermore, the analysis identifies several functions of cryptocurrencies that contribute to their
growing significance in finance. These include the facilitation of faster cross-border payments,
the potential for financial inclusion in developing regions, and the introduction of innovative
financial products such as tokenized assets. However, the volatility of cryptocurrencies presents
challenges, as their unpredictable price movements can complicate their use as stable stores of
value.(England, 2023)

Overall, the synthesis of data on Bitcoin and cryptocurrencies highlights their role as disruptors
in the financial sector. Their decentralized nature fosters innovation while challenging existing
regulatory frameworks. As cryptocurrencies continue to evolve, understanding their implications
for traditional banking practices will be crucial for stakeholders aiming to navigate this rapidly
changing landscape.

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6. Market performance and competitiveness in the markets
Bitcoin's market performance has shown significant resilience and competitiveness as of October
2024. Currently trading around $68,120 Bitcoin has recently experienced notable volatility, with
a price surge fueled by positive ETF inflows and general market optimism. Over the past week,
Bitcoin has gained approximately 10.82%, reflecting a strong upward trend despite facing
resistance around the $68,500 mark. Analysts suggest that a breakout above this level could
pave the way for further gains towards the $72,500-$74,500 range.(Vawda, 2024)

The competitive landscape for Bitcoin remains robust, particularly as institutional interest grows.
Recent data indicates that U.S. spot Bitcoin ETFs have seen substantial inflows, with reports of
over $555 million in net inflows recently, marking a significant increase in institutional
participation. This influx is crucial as it suggests a shift in market dynamics, where traditional
investors are increasingly embracing cryptocurrencies.(Vawda, 2024)

However, challenges persist. Despite the positive ETF activity, actual demand for Bitcoin has
reportedly waned since March 2024, raising concerns about sustainability in price increases.
Technical analysis shows that while Bitcoin is forming a bullish flag pattern, it must overcome
key resistance levels to confirm a sustained upward trajectory. Additionally, external factors such
as macroeconomic conditions and regulatory developments will continue to influence Bitcoin's
competitiveness in the broader financial landscape.(CoinSwitch & CoinSwitch, 2024)

Overall, while Bitcoin's current performance is promising with strong institutional backing and
potential for further gains, ongoing monitoring of market sentiment and demand dynamics will
be essential to understanding its future trajectory in the competitive cryptocurrency
market.(CoinSwitch & CoinSwitch, 2024)

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7. Future prospects and any recommendation
The future of Bitcoin appears promising, with analysts projecting substantial price increases
driven by institutional adoption and favorable market conditions. Bernstein analysts have revised
their price target for Bitcoin to nearly $200,000 by the end of 2025, citing strong inflows into
spot Bitcoin ETFs as a significant factor behind this optimism. This projection assumes that
these ETFs will account for approximately 7% of the total circulating Bitcoin supply by that
time. Additionally, industry experts like Peter Brandt and Max Keiser echo similar sentiments,
predicting prices could reach between $120,000 and $200,000 in the near future. (Bitcoin Price
Prediction 2030 & 2040 (July 2024 Update), n.d.)

Key factors influencing these projections include institutional adoption, as the approval and
launch of spot Bitcoin ETFs by major financial institutions are expected to drive demand
significantly. Regulatory developments will also play a crucial role; positive changes could
enhance market confidence and facilitate broader adoption. Technological innovations, such as
the Lightning Network, aim to improve Bitcoin's scalability and transaction speed, making it
more viable for everyday use. Furthermore, macroeconomic factors like interest rates and
inflation will impact Bitcoin's attractiveness as an alternative asset.(The Future of Bitcoin in
2024 and Beyond - Complete Analysis, n.d.)

To successfully navigate the evolving cryptocurrency landscape, investors should adopt a

long-term investment strategy, maintain a diversified portfolio, stay informed about regulatory
changes, and assess their risk tolerance. Consulting with digital asset experts can provide
valuable insights and help tailor investment strategies. Despite optimistic future prospects for
Bitcoin, a well-thought-out approach involving diversification, risk management, and market
awareness is crucial..(The Future of Bitcoin in 2024 and Beyond - Complete Analysis, n.d.)

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8. Final Conclusion
In conclusion, Bitcoin and other cryptocurrencies have significantly transformed the global
financial landscape, enabling faster transactions, financial inclusion, and innovative financial
products. They have set the stage for peer-to-peer transactions, challenging traditional banking
practices. However, the inherent volatility of cryptocurrencies makes them difficult to use as
stable stores of value. As institutional interest grows and regulatory frameworks evolve,
understanding these dynamics is crucial for stakeholders. While Bitcoin's potential for price
increases is strong, investors should focus on diversification and risk management. As
cryptocurrencies continue to evolve, they will play a pivotal role in shaping the future of finance,
requiring ongoing analysis and adaptation from investors and traditional financial institutions.

(1919 words)

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9. References
● Härdle, W. K., Harvey, C. R., & Reule, R. C. G. (2019). Understanding
Cryptocurrencies*. Journal of Financial Econometrics, 18(2), 181–208.
https://doi.org/10.1093/jjfinec/nbz033
● Pernice, I. G. A., & Scott, B. (2021b, May 31). Cryptocurrency. Internet Policy Review.
https://policyreview.info/glossary/cryptocurrency
● Pernice, I. G. A., & Scott, B. (2021c, May 31). Cryptocurrency. Internet Policy Review.
https://policyreview.info/glossary/cryptocurrency
● Redirecting. (n.d.).
https://ebookcentral.proquest.com/lib/swin/reader.action?docID=7184513&ppg=14
● Pernice, I. G. A., & Scott, B. (2021, May 31). Cryptocurrency. Internet Policy Review.
https://policyreview.info/glossary/cryptocurrency
● Wikipedia contributors. (2024, October 10). History of bitcoin. Wikipedia.
https://en.wikipedia.org/wiki/History_of_bitcoin
● Shrivastava, G., Le, D., & Sharma, K. (n.d.). Cryptocurrencies and Blockchain
Technology Applications. O’Reilly Online Learning.
https://learning.oreilly.com/library/view/cryptocurrencies-and-blockchain/978111962116
4/c01.xhtml#h-2-5
● Redirecting. (n.d.-b).
https://ebookcentral.proquest.com/lib/swin/reader.action?docID=7290806
● Vawda, Z. (2024, October 15). Bitcoin (BTC/USD) Eyes a Breakout, Have the Stars
Finally Aligned? - MarketPulse. MarketPulse.
https://www.marketpulse.com/crypto/bitcoin-btc-usd-eyes-a-breakout-have-the-stars-final
ly-aligned/zvawda
● CoinSwitch, T., & CoinSwitch, T. (2024, October 17). Crypto Market Analysis | 17
October 2024. CoinSwitch.
https://coinswitch.co/switch/market-analysis/17-october-2024/
● FXStreet. (n.d.). Bitcoin (BTC) News, Analysis and Forecast - FXStreet.
https://www.fxstreet.com/cryptocurrencies/bitcoin
● Bitcoin Price Prediction 2030 & 2040 (July 2024 Update). (n.d.). Swan Bitcoin.
https://www.swanbitcoin.com/economics/bitcoin-price-prediction/
● Redirecting. (n.d.-c).
https://ebookcentral.proquest.com/lib/swin/reader.action?docID=6686739&query=
● England, J. (2023, April 24). Financial Inclusion: Cryptocurrency and DeFi for the
Unbanked. FinTech Magazine.
https://fintechmagazine.com/articles/crypto-regulations-and-building-financial-inclusion

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● Achieving Financial Inclusion Through Digital Currencies. (n.d.). UNDP.
https://www.undp.org/policy-centre/singapore/blog/achieving-financial-inclusion-through
-digital-currencies
● Lin, J.-H., Marchese, E., Tessone, C. J., Squartini, T., & The Authors. (2022). The
weighted Bitcoin Lightning Network. In Chaos, Solitons and Fractals (Vol. 164, p.
112620). https://doi.org/10.1016/j.chaos.2022.112620
● Wang, P., Zhang, H., Yang, C., & Guo, Y. (2021). Time and frequency dynamics of
connectedness and hedging performance in global stock markets: Bitcoin versus
conventional hedges. Research in International Business and Finance, 58, 101479.
https://doi.org/10.1016/j.ribaf.2021.101479

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10. Appendix (not included in word count)

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Figure 1: Bitcoin's price history since its creation (January 2009 – April 2024)

Figure 2 ：Recent Performance Data (as of October 14, 2024)

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