Bitcoin’s price has passed the much-anticipated $100,000 mark, raising questions about how much higher it can go – and whether it can end its notorious volatility.
The world’s largest cryptocurrency reached around $103,400 shortly after 04:00 GMT on Thursday, before falling slightly.
AJ Bell investment analyst Dan Coatsworth called it a “magical moment” for cryptocurrency and said there was a “clear correlation”. Donald Trump’s election victory.
Trump took to social media to celebrate the milestone with “Congratulations Bitcoiners” and “You’re welcome!” posted
The president-elect previously promised to make the United States the “crypto capital” and “bitcoin superpower” of the world, which would help boost bitcoin’s price once he’s elected president.
He crossed the $100k barrier after Trump said he would nominate former Securities and Exchange Commission (SEC) Commissioner Paul Atkins to run the Wall Street regulator.
Mr. Atkins is considered to be more pro-cryptocurrency than current chief Gary Gensler.
“Clearly the expectation is that the new administration will be somewhat more favorable to crypto than the old administration,” said Andrew O’Neill, digital assets expert at S&P Global.
“So regarding the price of Bitcoin, I think the trend has been carried so far [and it will] It is likely to continue till the new year,” he added.
However, Bitcoin has a history of sharp falls as well as sharp rises – and some analysts warn that this is unlikely to change.
“Many people have gotten rich off the rise in cryptocurrency this year, but this high-risk asset isn’t for everyone,” Mr. Coatsworth said.
“It’s volatile, unpredictable and driven by speculation, none of which invests gold at night.”
During the US presidential campaign, Trump tried to appeal to cryptocurrency investors with a promise to fire Gary Gensler, head of US financial regulator the Securities and Exchange Commission (SEC), on “day one” of his presidency.
Mr. Gensler’s approach to the cryptocurrency sector has been less friendly than Trump’s.
He told the BBC in September It was an industry “full of frauds and hucksters and grifters”.
Under his leadership, the SEC brought a record 46 crypto-related enforcement actions against firms in 2023.
Mr. Gensler said in November He will leave the post on January 20. – Trump’s Inauguration Day.
The choice of Paul Atkins to replace him at the helm of the SEC has been welcomed by crypto advocates.
Mike Novogratz, founder and chief executive of US crypto firm Galaxy Digital, said he hoped a “clear regulatory path” would now accelerate the digital currency’s entry into the “financial mainstream” of the ecosystem.
2024 has seen a less drastic fall in the value of Bitcoin than in previous years.
In 2022, after the crypto exchange FTX, its price quickly fell below $16,000. fell into bankruptcy.
In addition to Trump’s election victory, several key events have helped boost investors’ confidence that the stock will continue to rise.
SEC Several Spot Bitcoin Exchange Traded Funds Approved. (ETFs) allow major investment firms such as Blackrock, Fidelity and Grayscale to sell products based on the value of Bitcoin.
Some of these products have generated billions of dollars in cash.
But the prospect of a sudden drop in value serves as a reminder that it is not like orthodox currencies — and investors have no protection or recourse if they lose money on Bitcoin investments.
Carol Alexander, professor of finance at the University of Sussex, told BBC News that the fear of missing out (FOMO) among young people will continue to drive Bitcoin’s price up.
But he added that while this may boost other cryptocurrencies, many young investors investing in meme coins are losing money.
Kathleen Breitman, co-founder of another cryptocurrency – Tezos – also had a word of caution for those tempted to invest in Bitcoin.
“These are markets that move quickly so you need to be extraordinarily careful with it,” he told the BBC.