Bitcoin’s price has exploded through the much-anticipated threshold of $100,000, raising questions about how much higher it can go — and whether it can shake off its notorious volatility.
The world’s largest cryptocurrency rose to around $103,400 before falling slightly after 04:00 GMT on Thursday.
Dan Coatsworth, an investment analyst at AJ Bell, described it as a “magic moment” for cryptocurrency and said it had a “clear link”. Donald Trump’s election victory.
“Congratulations Bitcoiners” and “You’re welcome!” Trump took to social media to celebrate the milestone by posting.
The president-elect has previously vowed to make the US a “crypto capital” and a “bitcoin superpower,” helping to boost the price of bitcoin after he was elected president.
It broke 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 more pro-cryptocurrency than current chief Gary Gensler.
“The expectation is that the new regime will be a little more favorable to crypto than the old regime,” said Andrew O’Neill, digital assets expert at S&P Global.
“So for the price of bitcoin, I think that’s driven the trend so far (and that) will continue into the new year,” he said.
However, bitcoin has a history of sharp declines and rapid rises — and some analysts warn that’s unlikely to change.
“A lot of people have gotten rich from cryptocurrency, which has skyrocketed in value this year, but this high-risk asset isn’t right for everyone,” Mr Coatsworth said.
“It’s volatile, unpredictable and driven by speculation, nothing that investors sleep at night.”
During the US presidential election campaign, Trump tried to appeal to cryptocurrency investors – promising to fire US financial regulator Securities and Exchange Commission (SEC) chairman Gary Gensler “one day” in his presidency.
Mr. Gensler’s approach to the cryptocurrency sector is less friendly than Trump’s.
He is told the BBC in September It was an industry “full of fraud 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 steps down on January 20 – Trump Inauguration Day.
Crypto advocates have welcomed the selection of Paul Atkins to helm the SEC.
Mike Novogratz, founder and chief executive of US crypto firm Galaxy Digital, said he hopes a “clear regulatory path” will now accelerate the digital currency ecosystem’s entry into the “financial mainstream.”
Bitcoin has seen less decline in value in 2024 than previous years.
In 2022, the price of the crypto exchange FTX dropped below $16,000. He fell into bankruptcy.
Along with Trump’s victory in the election, a number of key events have helped boost investor confidence, increasing its value.
SEC Several spot Bitcoin exchange trading funds are approved (ETFs) allow giant investment firms such as BlackRock, Fidelity and Grayscale to sell products based on the price of Bitcoin.
Some of these products have seen billions of dollars in cash inflows.
But the ability to suddenly drop in value serves as a reminder that it’s not like traditional currencies — and investors have no protection or recourse if they lose money on a bitcoin investment.
Carol Alexander, professor of finance at the University of Sussex, told BBC News that fear of missing out (FOMO) among young people will see the price of Bitcoin rise.
But while this may cause a rise in other cryptocurrencies, many younger investors investing in meme coins are losing money, he said.
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 on momentum so you have to be extraordinarily careful with that,” he told the BBC.
