by Victor Solomon and Jude Ayua
Bitcoin price has crossed the highly anticipated $100,000 threshold, sparking both excitement and concern about its future. The cryptocurrency’s value surged to around $103,400 on Thursday before experiencing a slight dip. This milestone has been hailed as a “magic moment” by Dan Coatsworth, an investment analyst at AJ Bell, who attributes its success to Donald Trump’s election victory.
Trump’s win has been seen as a positive catalyst for bitcoin, with the president-elect having pledged to make the US a “crypto capital” and “Bitcoin superpower.” His nomination of Paul Atkins, a pro-cryptocurrency former SEC commissioner, to run the Wall Street regulator has also boosted investor confidence. As Andrew O’Neill, a digital assets expert at S&P Global, noted, “Clearly, there is anticipation that the new administration is going to be somewhat more favorable to crypto.”
Despite this optimism, some analysts have sounded a note of caution, reminding investors that bitcoin’s history is marked by sharp falls as well as rapid rises. Dan Coatsworth warned that bitcoin is a “high-risk asset” that’s “volatile, unpredictable, and driven by speculation,” making it unsuitable for all investors.
Bitcoin’s meteoric rise to $100,000 is a significant milestone, but what are the factors behind this surge, and what challenges and opportunities lie ahead?
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The Significance of $100,000: A Psychological and Technical Milestone
Reaching the $100,000 mark is a monumental achievement for bitcoin, carrying significant psychological and technical implications. From a psychological perspective, this milestone represents a major breakthrough in mainstream recognition and adoption. It shows bitcoin’s growing legitimacy and potential for long-term growth, boasting investor confidence and attracting new entrants to the market. The $100,000 threshold has become a psychological benchmark, symbolizing a new era of maturity and stability for bitcoin.
From a technical analysis perspective, the journey to $100,000 was marked by several key chart patterns and trend lines. The dominant cryptocurrency’s price action was characterized by a series of higher highs and higher lows, indicating a strong upward trend. The breakout above the $50,000 resistance level marked a significant turning point, as it confirmed the resumption of the uptrend. The subsequent rally was fueled by a combination of factors, including increasing institutional adoption, improving regulatory environment, and growing mainstream recognition.
The attainment of the $100,000 milestone is likely to have an impact on investor sentiment and market volatility. On one hand, it may lead to increased confidence and optimism among investors, thereby triggering a further price appreciation. On the other hand, it may also lead to increased volatility, as some investors may choose to take profits, while others may view the milestone as a buying opportunity.
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The Drivers of Bitcoin’s Price Surge
The Trump Effect
Donald Trump’s impact on the cryptocurrency market, particularly bitcoin, has been significant. During his presidential campaign, Trump promised to fire Gary Gensler, the chair of the United States Securities and Exchange Commission (US SEC), who has been critical of the cryptocurrency industry. Gensler has described the industry as “rife with fraud and hucksters and grifters” and, under his leadership, the SEC has taken 46 enforcement actions so far against crypto firms in 2023. Trump also promised during his election campaigns to lessen regulations around crypto. This includes tax cuts and to make the US the “crypto capital of the world,” which has positioned the country as a major competitor globally.
Trump’s pro-crypto stance has been seen as a positive development for the industry, with many expecting a more favourable regulatory environment under his administration. Trump nominated Paul Atkins, a former SEC commissioner and cryptocurrency advocate, to head the SEC, signifying a friendlier regulatory approach under his administration. The industry has received Atkin’s nomination with optimism. Kristin Smith, CEO of the Blockchain Association, noted, “Atkins brings a fresh perspective and extensive knowledge of the digital asset ecosystem. We are eager to collaborate with him to drive a new era of American crypto innovation.”
Read also: Paul Atkins to Succeed Gensler as US SEC Chair.
Trump celebrated bitcoin’s price achievement via his social media, Truth Social: “CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!! Together, we will Make America Great Again!”
Bitcoin ETFs: A crucial factor for the surge
The approval of spot Bitcoin ETFs in the US marks a significant milestone in the adoption and growth of Bitcoin. By providing a simplified and regulated investment opportunity, spot Bitcoin ETFs can attract institutional investors and retail investors who were previously hesitant to invest in bitcoin directly. This increased demand can lead to higher prices, improved liquidity, and reduced volatility.
The introduction of spot Bitcoin ETFs can also bridge the gap between the cryptocurrency market and traditional finance. By meeting regulatory requirements and providing a familiar investment structure, spot Bitcoin ETFs can help to build confidence among institutional investors and promote wider bitcoin adoption. As the cryptocurrency market continues to evolve, the growth of spot Bitcoin ETFs is likely to play a key role in its development and maturation.
Read Also: Bitcoin ETFs: A game-changer for crypto adoption or just a flash in the pan?
Advocacy
While Gensler-led US SEC effectively championed “regulation-by-enforcement,” firms and advocates also filed suits against the US SEC. In July 2024, Coinbase sued the US SEC for failing to provide regulatory clarity. In April 2024, the Blockchain Association and the Crypto Freedom Alliance of Texas filed a lawsuit against the US SEC for introducing a new rule that expanded its interpretation of “dealer” to include digital assets entities. On 18 November 2024, eighteen Republican attorneys general sued the US SEC and Gensler claiming the agency overstepped its authority in crypto regulation.
Impact of global policies and regulations
Besides Trump and the emergence of bitcoin ETFs, other factors have also influenced bitcoin’s surge to $100k. Several regulatory events and broader macroeconomic developments have shaped market confidence and institutional participation. For instance:
- Regulatory clarity and crypto adoption in major economies: Countries like the US, UK, and others in the EU have made strides in crypto regulation. Spot bitcoin exchange traded funds approval in the US marked a turning point by legitimizing bitcoin as a regulated asset.
- Global policies: Some countries worldwide are embracing bitcoin as legal tender (e.g., El Salvador) or as part of their national reserves (e.g., US), further cementing it as a legitimate asset. Regulatory clarity in jurisdictions like the UAE and Singapore also attracted corporate and institutional capital, creating a global wave of adoption.
- Global coordination efforts: The Financial Action Task Force (FATF) and other global regulatory bodies have harmonized anti-money laundering and know your customer (AML/KYC) standards for crypto exchanges, boosting the industry’s credibility. The improved ability to combat illicit activities has made governments and institutions more comfortable engaging with bitcoin and other cryptocurrencies.
Read Also: U.S SEC drops investigation on Ether: What It Means for Ethereum’s future
Future Potential Price Targets and Opportunities for Growth
Despite security concerns largely, the cryptocurrency market continues to grow and mature. As more institutional investors enter the market and regulatory frameworks are developed, the security and legitimacy of the market are likely to improve. Also, the development of new technologies such as quantum-resistant cryptography and decentralized finance (DeFi) platforms is likely to enhance the security and functionality of the cryptocurrency market.
Looking ahead, potential price targets for bitcoin are varied and depend on a range of technical and fundamental factors. From a technical perspective, bitcoin’s price action has been characterised by a series of higher highs and higher lows, indicating a strong upward trend. Also, the cryptocurrency’s relative strength index (RSI) has been trending upward, suggesting that the price may be due for a correction. Fundamental analysis of market sentiment, adoption rates, and global economic trends also suggests that Bitcoin’s price may continue to rise in the long term.
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One potential price target for bitcoin is $150,000, which would represent a significant increase from current levels. This target is based on a technical analysis of chart patterns and trend lines, as well as fundamental analysis of market sentiment and adoption rates. Also, the growing institutional investment in bitcoin and the development of new technologies such as DeFi platforms are likely to enhance the cryptocurrency’s legitimacy and functionality, driving up demand and prices.
However, the future of bitcoin price will depend on a range of factors, including market sentiment, adoption rates, and global economic trends. While there are potential risks and challenges ahead, the growing institutional investment in bitcoin and the development of new technologies are likely to drive up demand and prices in the long term. As the cryptocurrency market continues to evolve and mature, it is likely that bitcoin will remain a key player, driving innovation and growth in the years to come.
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Victor Solomon is a technical analyst at Crypto Asset Buyer (CAB). Over the years, Victor has gained valuable expertise in market analysis, risk management, and community management within the cryptocurrency ecosystem. The founder of Soluvic Crypto Hub, a crypto community where he equips newbies in the space, Victor’s mission is to empower individuals to uncover opportunities and safely navigate risks in the blockchain industry. Victor’s academic foundation includes a BSc. (Ed) in Mathematics, a credential that underpins his strong analytical and problem-solving abilities. Currently, he is expanding his technical expertise as a Software Development student at Brigham Young University. He is an Ex African Manager of Newscrypto.
Jude Ayua is a policy analyst at CAB. A lawyer, Jude is an associate at Infusion Lawyers where he is a member of the Blockchain & Virtual Assets Group. He is also a member of the Policy & Regulations Committee of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN). Jude reports and writes on crypto policy and regulations. jude@infusionlawyers.com
