The price of Bitcoin reaching $100,000 marks a significant milestone for the cryptocurrency, transitioning from a niche cypherpunk idea to a more widely accepted financial asset. This moment is seen as a historic one in the world of crypto.
Bitcoin, previously considered a niche investment for a small group of technology enthusiasts, has steadily increased in value over the years. It reached $1 in 2011, $1,000 in 2013, and has now surpassed the highly sought after six-figure mark in 2024.
The recent rise in Bitcoin's value shows how it has transformed from an experimental concept to a recognized and valuable asset in the global financial market.
However, reaching $100,000 was not an easy journey for the cryptocurrency. Despite being declared "dead" multiple times, it consistently bounced back and surpassed expectations.
According to Mikko Ohtamaa, co-founder of Trading Strategy, there is a limited window of opportunity (two to three years) to demonstrate the positive impact of cryptocurrency on the world. This is seen as the last opportunity to make a significant impact, but there is currently favorable momentum in the industry.
For the past decade, the focus has been on speculation, but now it's time to transition to practical, real-world applications. This current surge in value is noteworthy for several important reasons.
Today, Bitcoin is seen not only as a speculative asset, but also as a secure investment, protection against inflation, and a legitimate asset category that is gaining popularity among institutional investors.
Origin: Cynthia Lummis
Exchange-traded funds (ETFs) that are focused on cryptocurrencies are becoming increasingly popular in countries like the United States and Hong Kong, making it easier for investors to participate in this market. The election of Donald Trump, a supporter of cryptocurrencies, as the president of the US has further boosted the growth of the cryptocurrency industry.
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During his campaign, Trump pledged to appoint a new Chair for the Securities and Exchange Commission in place of Gary Gensler. Gensler is viewed negatively in the cryptocurrency community for his tough regulatory stance.
Investors are optimistic that this change could lead to fewer obstacles from regulations, creating a more welcoming atmosphere for cryptocurrencies. Gensler's time in office, known for its focus on enforcing regulations rather than providing clear guidelines, has received significant criticism from the industry.
The road to reaching $100,000 for Bitcoin had a rough beginning with a single crash. The journey has been unpredictable and chaotic with fluctuating prices, market crashes, and moments of uncertainty about its future.
One of the most memorable moments of struggle for Bitcoin was when its value dropped from $1,000 in 2013 to $200 in 2014. The collapse of Mt. Gox, the biggest Bitcoin exchange at the time, had a significant impact during this time and its creditor payments are still being discussed today, ten years later.
By the end of 2017, the value of Bitcoin rose significantly to almost $20,000 due to the surge in initial coin offerings (ICOs). But, regulatory actions were taken shortly after, with the US categorizing ICOs as unregistered securities and China completely prohibiting them. As a result, by December 2018, the price of Bitcoin had dropped to $3,200.
A recent study found that 80% of Initial Coin Offerings (ICOs) that took place in 2017
In 2021, Bitcoin experienced another significant increase, reaching a value of $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 cryptocurrency's upward trend.
Origin: Arkham Intelligence
However, excitement for Bitcoin was dampened by regulatory actions, particularly in China where a crackdown on Bitcoin mining caused its value to drop sharply to $29,000. After reaching a new peak of $69,000 in November 2022, Bitcoin experienced a significant decline to a low of $15,000 due to various issues within the crypto industry such as FTX's collapse, Three Arrows Capital's downfall, and the crisis surrounding the Terra-Luna stablecoin.
As of 2024, Bitcoin has experienced a significant increase in value. The approval of spot Bitcoin ETFs by the SEC earlier in the year has allowed more people to participate in the market, and the rally has been further boosted by Trump's election in November.
According to market analyst Justin d'Anethan, the current driving forces behind Bitcoin's growth include increased accessibility through ETFs, interest from corporate buyers, and more investment from global institutions. Additionally, the move away from the US dollar in BRICS economies is also contributing to Bitcoin's appeal as a potential hedge against traditional reserve currencies in a changing financial landscape.
For supporters of Bitcoin, reaching $100,000 is significant beyond just being a numerical value. It serves as a psychological milestone that confirms the dedication and enthusiasm of those who have shown unwavering support for Bitcoin, as seen in the trend of using laser-eyed profile pictures on social media to express belief in this achievement.
However, d'Anethan clarified that reaching $100,000 is not the ultimate objective.
In the last year, the increase in Bitcoin's value has been primarily fueled by experienced investors. This includes corporate treasuries like MicroStrategy, the emergence of ETFs, and even pension funds beginning to invest in BTC, all without much attention or celebration.
Individual investors have not yet heavily invested in Bitcoin, but when they do, the price may not stop at $100,000. There is some debate surrounding the suggestion of creating a strategic Bitcoin reserve in Trump's campaign.
Author: Ed Krassenstein/Impure Hoonter
There are differing opinions on whether this move is a step towards centralization or not. Quary, the founder of Bitcoin marketplace Magisat, believes it does not affect Bitcoin's decentralized principles.
According to Quary, the ownership of Bitcoin does not have any impact on the network.
It is hoped that both the US and BRICS countries (Brazil, Russia, India, and China) have a shared interest in Bitcoin and both have significant investments in the cryptocurrency. This would create an ideal situation of a fair decentralized network where all parties can participate.
The question now is, what direction will Bitcoin take next? While reaching $100,000 is a major milestone, for many, it represents just the start of Bitcoin's broader narrative.
In the near future, as the US Federal Reserve is expected to continue lowering interest rates, Bitcoin may benefit from a positive overall market environment for high-risk investments.
According to d'Anethan, unless there is a significant selling off of assets due to bankruptcies in 2022 or an unexpected event, it appears that the easiest path forward is upward.
Nevertheless, historical data indicates that Bitcoin's path is not typically a consistent upward trend. It is probable that there will be corrections, even during times of positive momentum.
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With changing economic influences and developing fiscal strategies, Bitcoin has evolved from a specialized investment into a realistic option for managing finances.
Bitcoin's rise to $100,000 is a strong indicator that cryptocurrency is becoming increasingly established. This digital currency is seen as a way to protect against inflation, a secure asset, and a representation of financial independence. Despite its unpredictable nature and intricate workings, it is clear that cryptocurrency is here to stay and has the power to bring about significant changes in the financial world.