The price of Bitcoin reaching $100,000 marks a significant moment for the cryptocurrency, transitioning from its origins as a cypherpunk concept to gaining recognition and acceptance in the financial world.
Bitcoin, which was previously considered a niche asset for a small group of technology enthusiasts, has seen significant growth over the years. Its value has increased from $1 in 2011 to $1,000 in 2013, and has now reached over $100,000 in 2024.
The recent rise in Bitcoin's value indicates how it has transformed from an interesting experiment to a recognized and valuable financial asset on a worldwide scale.
The path to reaching $100,000 was not easy, despite the positive trends in the cryptocurrency market. Many people have declared cryptocurrency as "dead" multiple times, but it has consistently bounced back from those claims.
Mikko Ohtamaa, co-founder of Trading Strategy, mentioned that there is a short window of opportunity – about two to three years – to demonstrate the positive impact of cryptocurrency on the world. He believes that now is the best time to showcase the potential of crypto, as there is growing support for it.
Over the past decade, there has been a lot of guessing and assumptions. It is now the moment to move from guessing to actual practical use in the real world. This current surge in the market is notable for several important distinctions.
Today, Bitcoin is seen as more than just a risky investment – it is considered a reliable option for protecting wealth, guarding against inflation, and a legitimate asset type that is gaining popularity among institutional investors.
Origin: Cynthia Lummis
Exchange-traded funds (ETFs) that track cryptocurrencies have become more popular and accessible in countries like the United States and Hong Kong. The election of Donald Trump, a president supportive of cryptocurrencies, has further boosted the growth of the industry.
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During his campaign, Trump pledged to appoint a new Securities and Exchange Commission Chair to replace Gary Gensler, who is viewed as a controversial figure in the crypto community for his tough regulatory stance.
Investors are optimistic that this change in approach could lead to fewer obstacles from regulations, creating a more welcoming atmosphere for cryptocurrency assets. Gensler's time in office, known for its enforcement-based regulation style, has faced criticism from the industry for its lack of legal transparency.
The path towards reaching $100,000 for Bitcoin was not straightforward. It involved unpredictable price fluctuations, market crashes, and moments of uncertainty about its future.
One of the most significant moments of uncertainty for Bitcoin occurred when its value dropped from $1,000 in 2013 to $200 in 2014. This was largely influenced by the collapse of Mt. Gox, the leading Bitcoin exchange at the time, which still impacts the industry today as creditor payouts continue to be a topic of discussion even ten years later.
By the end of 2017, the price of Bitcoin surged to nearly $20,000 due to the popularity of initial coin offerings (ICOs). But shortly after, governments, including the US and China, started imposing regulations on ICOs. This led to a significant drop in the price of Bitcoin, which fell to $3,200 by December 2018.
New research indicates that a large majority of Initial Coin Offerings (ICOs) carried out in 2017 were found
In 2021, Bitcoin experienced a significant increase in value, reaching $63,000, thanks to the involvement of institutions and well-known companies like Tesla, led by Elon Musk.
Origin: Arkham Intelligence
However, excitement was subdued yet again due to government regulations: China enforced strict measures on Bitcoin mining, causing the price to plummet to $29,000. After reaching a peak of $69,000 in November 2022, Bitcoin sharply declined to $15,000 amidst turmoil in the cryptocurrency industry, including 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 in January allowed for more people to participate in trading, and the election of Trump in November has further boosted the market rally.
According to market analyst Justin d'Anethan, Bitcoin is currently being driven by factors such as increased accessibility through ETFs, interest from corporations, and greater investments from institutions worldwide. 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.
The price of $100,000 holds significant meaning for supporters of Bitcoin. It represents more than just a numerical value, but serves as a psychological milestone that confirms their long-standing enthusiasm and belief in the cryptocurrency. This is evident in the trend of supporters changing their profile pictures to include laser eyes as a symbol of their commitment to reaching this milestone.
However, d'Anethan clarified that reaching $100,000 is not the ultimate objective.
In the last year, the increase in Bitcoin prices has been mainly influenced by experienced investors such as corporate treasuries like MicroStrategy, the emergence of ETFs, and pension funds beginning to invest in BTC quietly.
"Regular investors haven't joined in yet, but when they do, the excitement will likely not end at $100,000." Trump's campaign also mentioned the possibility of creating a Bitcoin reserve for strategic purposes, which has caused varying opinions.
Author: Ed Krassenstein/Impure Hoonter
There are differing opinions on whether this development is a step towards centralization or not. Quary, the founder of the Bitcoin marketplace Magisat, believes it does not impact Bitcoin's decentralized principles.
According to Quary, the ownership of Bitcoin does not have an impact on the network.
It is hoped that both the United States and the BRICS countries (Brazil, Russia, India, and China) share an interest in Bitcoin and hold significant investments in the cryptocurrency. The ideal situation would be a decentralized network where all parties can participate without bias.
The future trajectory of Bitcoin is uncertain. While reaching $100,000 is a milestone, it is viewed as just the start of a bigger narrative for Bitcoin.
In the upcoming future, if the US Federal Reserve continues to lower interest rates as expected, Bitcoin may benefit from a positive overall environment for risky investments.
According to d'Anethan, the market is likely to continue rising unless there is a significant sell-off due to bankruptcies in 2022 or an unexpected event.
Nevertheless, looking back at past events, it is evident that Bitcoin's path to success is not always straightforward. It is common for price corrections to occur, even during periods of overall positive growth.
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With economic powers constantly changing and monetary policies evolving, Bitcoin has gone from being a specialized asset to a legitimate financial option.
Bitcoin's rise to $100,000 signifies that cryptocurrency is becoming more established and accepted as a valuable asset. This indicates that people see it as a way to protect against inflation, a secure investment, and a form of financial independence. Despite its unpredictability and intricate nature, the era of cryptocurrency is gaining momentum and is likely to have a significant impact on the financial landscape.