The price of Bitcoin approached the $100,000 mark for the first time in history - on the night of 23rd November it reached $99,850. Bitcoin’s value has been rising almost unstoppably following Donald Trump's victory in the US presidential election.
After winning the election on November 5th, Donald Trump is surrounding himself with more crypto loyalists for key positions in his administration. His advisors consulted with crypto industry representatives on possible changes in public policy. Under Trump, US authorities are expected to take a softer stance on cryptocurrencies. His campaign rhetoric included a strong emphasis on supporting the crypto business.
The price of Bitcoin against the US dollar on Coinbase, the largest US crypto exchange, slightly outperformed the rise in the USDT stablecoin pair on the two largest exchanges in the crypto market, Binance and Bybit, which are inaccessible in the US, since it began its surge in November. This likely indicates the dominance of demand for cryptocurrency from North American traders.
More than 20 percent of the global cryptocurrency market activity occurs in North America, and the US occupies a significant portion of it Bitcoin-based exchange-traded funds (ETFs) emerged there in early 2024, allowing cryptocurrency to be legally traded as stock on the NASDAQ or NYSE. The amount of capital under management in these ETFs has surpassed $100 billion, with 12 Bitcoin ETFs from issuers, including BlackRock, Grayscale, Bitwise, and Fidelity, which mark just ten months after launching and debuting exchanges.
Bitcoin 2024 rally
Bitcoin and the cryptocurrency market formed a generally positive news agenda around themselves. The world's largest asset management company, BlackRock, highlights Bitcoin over traditional assets. Large corporations continue to buy billions of dollars of Bitcoin. The two main factors driving the growth of Bitcoin globally are the decreasing availability of Bitcoins due to halving in April and the cyclical nature of the cryptocurrency market.
This bullish period was not the initial period in the 15-year history of cryptocurrencies. Each period lasted approximately four years, during which Bitcoin’s price reached a new peak before dropping and later setting another record.
In every instance, the upcoming peak in the following market phase is several times larger than the previous peak. The first example is when BTC hit $1200 in the latter part of 2013. Bitcoin reached its highest point of approximately $20,000 at the end of 2017 during the next market cycle, and by the end of 2021, it surged to $69,000 before experiencing another drop. Nearly three years later, Bitcoin broke that record and exceeded it in March 2024, reaching new highs after Donald Trump's electoral victory despite a decrease in value for several months.
Top analysts project Bitcoin's path to $100K after the latest price surge.
Following the recent price surge, market analysts are becoming increasingly optimistic about Bitcoin’s trajectory. Forecasts suggest that Bitcoin's all-time high could soon be eclipsed, as analysts set their sights on the elusive $100,000 mark. Some predictions even suggest a potential price of up to $200,000 within the next few months, fuelled by continued institutional investments and favorable regulatory conditions.
Michael Saylor, one of the most prominent proponents of Bitcoin, predicts a price of $13 million for the main cryptocurrency in the next 20 years. He also states that Bitcoin will increase to approximately 7% of global capital. Saylor made remarks during an appearance on CNBC's Squawk Box.
Mike Novogratz, CEO of investment firm Galaxy Digital, presumes that Bitcoin could potentially hit $500,000 if the US officially adds the cryptocurrency to its strategic national reserve.
Tim Draper, venture capitalist and co-founder of Draper Associates, predicts that the value of BTC will hit the $250,000 mark. For years, he has consistently made this prediction, but Draper believes that the US bureaucracy is slowing down the achievement of the price target.
Recently, the political environment has been crucial in influencing these anticipations. After this year’s victory of Donald Trump, there has been discussion about how his administration will handle cryptocurrency regulation. Reports indicate that Donald Trump is considering establishing a specific role in the White House that would concentrate on cryptocurrency policy, potentially helping legitimize and stabilize the market.
Introducing BlackRock's IBIT options tied to Bitcoin's price resulted in considerable trading activity and investor curiosity. On the initial day, these choices reached a remarkable $2 billion in trading volume, indicating strong institutional trust in Bitcoin’s potential.
Trump’s victory sparked market reactions.
The political climate surrounding Trump's return to power has undeniably influenced the market dynamics. Dubbed the "Trump trade," this phenomenon reflects how various asset classes respond positively to his administration's anticipated policies on digital currencies.
On November 21, Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), announced that he would resign on January 20, the day of Donald Trump's inauguration. Trump had pledged to replace Gensler if he won the presidency.
Gensler has been a controversial figure at the SEC, particularly regarding his stance on cryptocurrency. Since April 2021, he has overseen lawsuits and enforcement actions against major crypto firms, including Coinbase and Binance, and has imposed significant fines. His approach is often perceived as stifling innovation.
He has prompted the SEC to adopt a more stringent approach toward cryptocurrencies. He has also criticized fraudulent activities and the misleading of investors within the industry. This has made him a polarizing figure among cryptocurrency enthusiasts, and today, many are very optimistic about his departure, as it may pave the way for a more favorable regulatory environment under Trump.
Major players in the US crypto business are vying for a place on Trump's new Cryptocurrency Advisory Council. The council will address issues in the digital asset space and work with Congress on cryptocurrency legislation.
In addition, this council will have to work on Trump's promised government Bitcoin reserves.
However, while optimism reigns supreme in the crypto community, investors should approach this volatile market cautiously. The rapid ascent of BTC prices can be exhilarating, but also fraught with risks. Investors should conduct thorough research and consider their risk tolerance before taking action.
Conclusion
Reaching the milestone of $100,000 per Bitcoin is certainly an impressive achievement; however, it is unlikely to alter the overall cryptocurrency market dramatically. Even if Bitcoin experiences a correction following this surge, it may pave the way for broader opportunities within the cryptocurrency ecosystem. Factors that could contribute to its potential growth include political events such as Trump's election victory and monetary policy changes like a reduction in key interest rates by the Federal Reserve.
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