What’s next for Bitcoin after breaking the $100,000 barrier?
Bitcoin’s price has crossed the much-anticipated $100,000 threshold, raising questions about how much higher it can go – and whether it can shake off its notorious volatility.
The world’s largest cryptocurrency hit nearly $103,400 shortly after 04:00 GMT on Thursday before falling slightly.
Dan Coatsworth, investment analyst at AJ Bell, called it a “magical moment” for the cryptocurrency and said it has a “clear link.” Donald Trump’s election victory,
Trump posted on social media to celebrate the milestone, saying “Congratulations Bitcoiners” and “Welcome back!”
The President-elect previously promised to make the US the “crypto capital” of the world and a “Bitcoin superpower,” which would help boost the price of Bitcoin after being 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 seen as far more pro-cryptocurrency than current premier Gary Gensler.
“Clearly there is an expectation that the new administration will be somewhat more friendly to crypto than the old administration,” said Andrew O’Neill, digital assets expert at S&P Global.
“So for the price of Bitcoin, I think this is the trend so far (and will likely continue into the new year),” he said.
However, Bitcoin has a history of rapid rises coupled with sharp declines – and some analysts warn that this is unlikely to change.
“Many people have become wealthy this year from the rising value of cryptocurrencies, but this high-risk asset is not suitable for everyone,” Mr Coatsworth said.
“It’s volatile, unpredictable and driven by speculation, none of which makes any investors sleep at night.”
During the US presidential election campaign, Trump sought to appeal to cryptocurrency investors with a promise to fire Gary Gensler, the chairman of US financial regulator Securities and Exchange Commission (SEC) on “day one” of his presidency.
Mr. Gensler’s approach toward the cryptocurrency sector has been decidedly less favorable than Trump’s.
He told the BBC in September It was an industry that was “full of fraudsters and plunderers”.
Under his leadership, the SEC took a record 46 crypto-related enforcement actions against firms in 2023.
Mr. Gensler said in November He will step down 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 hopes the “clear regulatory path” now in place will speed up the digital currency ecosystem’s entry into the “financial mainstream”.
Bitcoin is expected to see a less drastic decline in value during 2024 than in previous years.
After crypto exchange FTX saw its price rapidly fall below $16,000 in 2022 fell into bankruptcy,
Several key events, including Trump’s victory in the election, have helped boost investor confidence that its value will continue to rise.
seconds Several spot bitcoin exchange traded funds approved ETFs allow giant investment firms like BlackRock, Fidelity, and Grayscale to sell products based on the price of Bitcoin.
Some of these products have seen billions of dollars in cash flows.
But the possibility of a sudden drop in its value serves as a reminder that it is not like conservative 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 continue to drive the price of Bitcoin higher.
But he said that while this could lead to a rise in 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 looking to invest in Bitcoin.
“These are markets that move quickly so you need to be very cautious about it,” he told the BBC.
