Bitcoin’s price has surged past the long-awaited $100,000 mark, prompting questions about its future. The rapid rise has many wondering if the cryptocurrency can maintain this momentum while overcoming its volatility.
Bitcoin’s Rise and Trump’s Influence
Bitcoin briefly hit $103,400 around 04:00 GMT on Thursday before dropping slightly. Dan Coatsworth, investment analyst at AJ Bell, called the moment “magic” and linked it to Donald Trump’s election win. Trump celebrated on social media, tweeting “congratulations Bitcoiners” and “you’re welcome!” He had promised to make the US the “crypto capital” and a Bitcoin superpower. This statement is believed to have boosted Bitcoin’s price after his election.
Trump’s plan to appoint former SEC commissioner Paul Atkins to lead the Wall Street regulator further fueled the rise. Atkins is seen as more supportive of cryptocurrency than the current SEC chair, Gary Gensler. According to Andrew O’Neill, a digital assets expert at S&P Global, Bitcoin’s price increase reflects optimism about a more crypto-friendly administration. He predicts this trend may continue into the new year.
The Volatility of Bitcoin
Despite the current surge, Bitcoin has a history of sharp drops. Coatsworth warns that while many have profited from Bitcoin’s rise, its volatility makes it a risky investment. “It’s unpredictable, driven by speculation, and isn’t suitable for everyone,” he said.
Trump’s Crypto Policies and Market Sentiment
During his campaign, Trump promised to remove SEC chair Gensler on day one of his presidency. Gensler had criticized the cryptocurrency industry, calling it “rife with fraud and grifters.” Under his leadership, the SEC took aggressive action, filing 46 crypto-related enforcement actions in 2023. Gensler will step down on January 20, the day of Trump’s inauguration. Crypto advocates have welcomed the nomination of Paul Atkins, hoping for clearer regulation.
In 2024, Bitcoin’s value has shown fewer drastic drops than in previous years. In 2022, Bitcoin’s price fell below $16,000 after the collapse of crypto exchange FTX. Key events, such as the SEC approving Bitcoin exchange-traded funds (ETFs), have further boosted investor confidence. Major firms like BlackRock, Fidelity, and Grayscale now offer Bitcoin-based products, attracting billions in investments.
Caution and Risk in the Crypto Market
Though investor enthusiasm is high, Bitcoin’s sudden drops remind investors that it is not a traditional currency. Those investing in Bitcoin have no protection if the value drops.
Carol Alexander, a finance professor at Sussex University, believes fear of missing out (FOMO) among younger investors will keep driving Bitcoin’s price up. However, she cautions that many young investors in meme coins are losing money. Kathleen Breitman, co-founder of Tezos, also warns investors to be cautious. “These markets move on momentum, so be extraordinarily careful,” she advises.
