The price of Bitcoin reaching $100,000 marks a significant milestone for the cryptocurrency, transitioning from a niche cypherpunk ideal to a widely recognized asset in the financial world.
Bitcoin, which was once considered a niche investment for a specific group of people interested in cryptography and technology, has steadily increased in value over the years. Starting at $1 in 2011, it reached $1,000 in 2013, and has now surpassed the significant milestone of six figures in 2024.
The recent increase in Bitcoin's value reflects how it has transformed from an interesting experiment to a widely recognized global financial asset.
The path to reaching $100,000 was not easy for the cryptocurrency, as it faced many challenges and setbacks along the way. Despite being declared "dead" numerous times, it always managed to bounce back and continue its upward momentum.
According to Mikko Ohtamaa, co-founder of Trading Strategy, there is a limited window of opportunity of two to three years to demonstrate how cryptocurrency can positively impact the world. He believes that this is the last chance to make a significant impact, but the current conditions are favorable for success.
For the past decade, the focus has been on speculation. It is now time to shift towards practical, real-world applications. This recent surge in market activity is notable for several significant distinctions.
Today, Bitcoin is not simply seen as a speculative investment, but rather as a secure option to protect against economic instability, a safeguard against rising prices, and a legitimate asset category that is increasingly being adopted by institutions.
Credit: Cynthia Lummis
Exchange-traded funds (ETFs) focused on cryptocurrencies have become more readily available in countries like the United States and Hong Kong. The election of Donald Trump, who is supportive of cryptocurrencies, has created a favorable environment for the industry.
Connected: A report suggests that the adoption of cryptocurrencies is expected to reach 8% by 2025
During his campaign, Trump pledged to appoint a new Securities and Exchange Commission Chair to replace Gary Gensler, who is perceived as a foe in the cryptocurrency industry for his rigorous enforcement tactics.
Investors are optimistic that this change could lead to fewer obstacles in regulations, creating a more favorable atmosphere for cryptocurrencies. Gensler's time in office, characterized by a strategy of enforcing regulations through legal action, has faced significant criticism from the industry for its lack of clear legal guidelines.
The road to reaching $100,000 for Bitcoin began with a significant drop in value. Bitcoin's climb to this milestone has been far from straightforward, characterized by extreme fluctuations in price, market crashes, and moments of uncertainty about its future.
One of the most significant moments of struggle for Bitcoin was when its value dropped from $1,000 in 2013 to $200 in 2014. This decline was largely influenced by the collapse of Mt. Gox, which was the largest Bitcoin exchange at the time. The aftermath of this event, including creditor payouts, is still being discussed a decade later.
Bitcoin reached record highs in December 2017, almost reaching $20,000, largely due to the popularity of initial coin offerings (ICOs). However, regulations were quickly implemented, with the US considering ICOs as unauthorized securities offerings and China completely prohibiting them. By December 2018, the value of Bitcoin had dropped to $3,200.
New research reveals that a high percentage of Initial Coin Offerings (ICOs) carried out in 2017 were fraudulent
Bitcoin experienced a significant increase in value in 2021, reaching $63,000. This was largely driven by the involvement of institutions and well-known companies like Tesla, led by Elon Musk, which contributed to the upward trend in Bitcoin's price.
Origin: Arkham Intelligence
Regulatory pressure caused a decrease in excitement in the cryptocurrency market. China's crackdown on Bitcoin mining led to a significant drop in its value to $29,000. After reaching a peak of $69,000 in November 2022, Bitcoin plummeted to $15,000 due to various issues in the broader crypto industry, including FTX's collapse, Three Arrows Capital's problems, and the Terra-Luna stablecoin crisis.
As of 2024, Bitcoin has experienced a significant increase in value. The approval of spot Bitcoin ETFs by the SEC earlier in the year allowed for more people to invest, and the rally has been further boosted by Trump's election in November.
According to market analyst Justin d'Anethan, Bitcoin is being driven by factors such as easier access through ETFs, increasing interest from corporations, and higher investments from institutions worldwide. Additionally, the move away from the US dollar in BRICS countries is also contributing to Bitcoin's appeal as a potential hedge against traditional reserve currencies in a changing global economy.
Why is $100,000 significant for Bitcoin?
For those who are optimistic about Bitcoin's future, $100,000 represents more than just a monetary value. It is seen as a crucial milestone that validates the strong belief and enthusiasm that Bitcoin supporters have shown over the years, as demonstrated by the "laser eye" trend on social media.
However, according to d'Anethan, reaching $100,000 is not the ultimate objective.
In the last year, the increase in Bitcoin's value has been primarily influenced by experienced investors. There has been a noticeable presence of corporate treasuries, such as MicroStrategy, as well as the emergence of ETFs and pension funds investing in BTC, all without much attention or publicity.
Individual investors have not yet fully invested in Bitcoin, and when they do, the price may surpass $100,000. Trump's campaign suggested the establishment of a Bitcoin reserve, leading to varying opinions.
Author Ed Krassenstein, also known as Impure Hoonter, provided the information
Different people have different opinions about it – some see it as a step towards centralization, while others, such as the founder of the Bitcoin marketplace Magisat, Quary, believe it has no impact on Bitcoin's decentralized principles.
Quary explained to Cointelegraph that the ownership of Bitcoin does not have any impact on the network.
It is hoped that both the United States and the BRICS countries (Brazil, Russia, India, and China) share a common interest in Bitcoin and both have significant investments in the cryptocurrency. This would create an ideal scenario of an impartial decentralized network where all parties can participate.
The future direction of Bitcoin is uncertain. While reaching $100,000 per coin is a significant milestone, for many, it is just the start of a larger narrative for Bitcoin's potential growth and impact.
In the near future, it is expected that the US Federal Reserve will continue to lower interest rates, which could create a positive environment for Bitcoin and other risky investments.
According to d'Anethan, the market is likely to continue moving upwards unless there is a significant liquidation due to bankruptcies in 2022 or an unexpected event like a black swan.
Nevertheless, looking back at history, Bitcoin's path is not typically a consistent upward trend. It is common for corrections to occur, even during times of positive momentum.
Article: Artificial intelligence (AI) could be consuming more energy than Bitcoin, putting pressure on Bitcoin mining operations.
As the global economy changes and financial policies evolve, Bitcoin has gone from being a specialized asset to becoming a practical alternative for managing finances.
Bitcoin reaching $100,000 is a strong indication that cryptocurrency is becoming more established and widely accepted. It serves as a way to protect against inflation, a secure asset, and a representation of financial independence. Despite its fluctuations and intricacies, the rise of Bitcoin highlights its potential to revolutionize the financial industry.