Bitcoin has now reached new heights, crossing the $100,000 mark for the first time on December 5. The development comes amid astronomical rise in the price of world’s largest and most traded cryptocurrency post Trump win, and just a few weeks after the cryptocurrency surpassed the $90,000 mark. As of now, Bitcoin’s market capitalization stands at a staggering $2 trillion.
The factors behind the growth in Bitcoin’s value include the effects of Bitcoin’s fourth halving in April, which reduced the rate of new supply. This supply constraint, combined with a strong demand, has boosted its price. Moreover, the approval of Bitcoin-focused exchange-traded funds (ETFs) in the US has been crucial in driving inflows of over $31 billion this year. These ETFs have provided institutional investors with an accessible pathway to Bitcoin as well.
Another factor to Bitcoin’s ascent is political developments, including the recent election of Donald Trump as U.S. president. Bitcoin’s price soared past $81,000 for the first time after Trump won the elections, and he had promised to make the US “the crypto capital of the planet” and create a “strategic reserve” of Bitcoin as well. His pro-crypto policies include his nomination of blockchain advocate Paul Atkins to chair the Securities and Exchange Commission (SEC).
“We’re witnessing a paradigm shift. After four years of political purgatory, bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream,” Mike Novogratz, founder and CEO of US crypto firm Galaxy Digital, commented on the development. “This momentum is fueled by institutional adoption, advancements in tokenization and payments, and a clearer regulatory path,” he added.
Speaking of Bitcoin, the crypto has come a long way from the days of its inception in 2009 by the pseudonymous Satoshi Nakamoto. At that time, it was envisioned as a decentralized currency that operated independently of traditional financial systems, and over the years, its value has risen dramatically, driven by cycles of speculation, advancements in tech, and increasing adoption, to name some.
Past bull runs have seen Bitcoin achieve extraordinary gains. In 2017, it surged by 1,900%, reaching $20,000 for the first time. The COVID-19 pandemic proved to be beneficial for the world’s largest cryptocurrency as well, as its price saw another massive increase and peaked at $69,000 in 2021. This year alone has seen its price rise by 126%, and Bitcoin is currently priced at $1,02,705.90 (a rise of 4%). Despite its success, Bitcoin faces challenges, including regulatory scrutiny, and environmental concerns over its energy-intensive mining process. Still, it is a victory for crypto enthusiasts, and some analysts foresee continued growth, with predictions of $120,000 or higher by the end of the year. Others, in contrast, caution against potential pullbacks as investors are securing profits.
