The price of Bitcoin reaching $100,000 is seen as a significant milestone for the cryptocurrency, marking a shift from its origins as a niche interest among cypherpunks to a more widely accepted and mainstream form of financial investment.
Bitcoin was once seen as a niche investment for a small group of people interested in technology, but has since increased in value significantly over the years. It started at $1 in 2011, reached $1,000 in 2013, and has now surpassed the six-figure mark in 2024.
The recent increase in the value of Bitcoin shows how it has transformed from a mere experiment to a recognized and valuable financial asset on a global scale.
The path to reaching $100,000 was not easy for the cryptocurrency, as it faced many challenges and setbacks. Despite being pronounced "dead" numerous times, it always managed to recover and rise again.
According to Mikko Ohtamaa, co-founder of algorithmic trading firm Trading Strategy, there is a limited window of opportunity of two to three years to demonstrate the positive impact that cryptocurrency can have on the world. Ohtamaa believes that this is the last opportunity to make a significant difference, and that current conditions are favorable for success.
For the past decade, there has been a lot of guessing and predicting. It is now important to move from guessing to actual practical use in the real world. This recent surge in the market is notable for a few important reasons.
Bitcoin is no longer seen simply as a speculative investment, but is now considered a safe haven asset, a protection against inflation, and a legitimate asset class that is increasingly being adopted by institutional investors.
Origin: Cynthia Lummis
Exchange-traded funds (ETFs) based on cryptocurrencies have become more widely available in countries like the United States and Hong Kong. The election of Donald Trump, who is supportive of cryptocurrencies, as the US president has further boosted the growth of the cryptocurrency industry.
Related: A report predicts that the adoption of cryptocurrency will reach 8% by 2025.
During Trump's campaign, he vowed to appoint a new person to lead the Securities and Exchange Commission in place of Gary Gensler. Gensler was viewed as a controversial figure in the crypto industry because of his firm stance on regulation enforcement.
Investors are optimistic that this change could lead to fewer obstacles from regulations, creating a more welcoming atmosphere for cryptocurrency assets. Gensler's time in office, characterized by a focus on enforcing regulations, has faced criticism from the industry for its lack of clear legal guidelines.
The path to reaching $100,000 for Bitcoin was not straightforward. It involved many ups and downs, including sudden price changes, market crashes, and moments of uncertainty about its future.
One of the most significant close calls for Bitcoin occurred when its value dropped from $1,000 in 2013 to $200 in 2014. This drop was heavily influenced by the collapse of Mt. Gox, which was the largest Bitcoin exchange at the time. Even now, ten years later, the creditor payouts from this event are still being talked about in the news.
Bitcoin hit a peak of close to $20,000 in December 2017, driven by the surge in initial coin offerings (ICOs). But, this was soon followed by government regulations that classified ICOs as unregistered securities in the US and led to an outright ban in China. As a result, by December 2018, the trading price of Bitcoin had dropped significantly to $3,200.
New research reveals that a majority of Initial Coin Offerings (ICOs) carried out in 2017 were fraudulent.
In 2021, Bitcoin experienced another significant increase in value, rising to $63,000. This was fueled by the involvement of institutions and well-known companies like Tesla, led by Elon Musk.
Origin: Arkham Intelligence
However, excitement in the market was dampened yet again due to regulatory pressure, specifically from China cracking down on Bitcoin mining. This crackdown caused the price of Bitcoin to sharply decline to $29,000. After reaching a new high of $69,000 in November 2022, Bitcoin experienced a significant drop to a low of $15,000. This drop was part of a broader turmoil within the cryptocurrency industry, which included FTX's collapse, Three Arrows Capital's downfall, 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 has allowed more people to participate in trading, 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 easier access through ETFs, increased interest from corporations, and greater investment from institutions worldwide. Additionally, the shift 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 global financial landscape.
Why is $100,000 significant for Bitcoin?
To Bitcoin enthusiasts, reaching $100,000 is not just a numerical value. It serves as a psychological milestone that confirms the dedication and belief in Bitcoin, as demonstrated by the popular "laser eye" trend on social media where supporters showed their faith by using laser-eyed profile pictures.
However, according to d'Anethan, the aim is not just to reach $100,000.
"In the last year, the increase in Bitcoin's value has primarily been influenced by experienced investors. Corporate treasuries like MicroStrategy, ETFs, and pension funds have all started investing in Bitcoin, but without much attention," he explained.
"Individual investors have not yet heavily invested, but once they do, the excitement will not just stop at $100,000." Trump's campaign also suggested the concept of a strategic Bitcoin reserve, which has caused a range of reactions.
Author: Ed Krassenstein/Impure Hoonter
There are differing opinions on whether this change is leading towards centralization or if it is seen as neutral to Bitcoin's decentralized principles, according to Quary, the founder of the Bitcoin marketplace Magisat.
Quary informed Cointelegraph that the ownership of Bitcoin does not have any impact on the network.
I hope that both the United States and the BRICS countries (Brazil, Russia, India, China) share an interest in Bitcoin and have significant investments in it. The ideal situation would be to have an impartial decentralized network where all parties can participate.
What is the future of Bitcoin?
Reaching $100,000 is a significant milestone, but for many, it marks the start of Bitcoin's greater narrative.
In the coming months, as the US Federal Reserve is expected to continue lowering interest rates, Bitcoin may benefit from a positive overall economic climate for high-risk 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, history has demonstrated that the path of Bitcoin is often not a continuous upward trend. It is probable that there will be corrections, even when there is positive momentum.
Publication: The energy consumption of artificial intelligence may surpass that of Bitcoin, posing a potential threat to Bitcoin mining operations.
With changing economic powers and developing monetary policies, Bitcoin has shifted from being a specialized asset to becoming a legitimate financial option.
Bitcoin reaching $100,000 is a clear indication that cryptocurrency is becoming more established and accepted. Its value as a protection against inflation, a secure asset, and a representation of financial independence is evident. Despite its unpredictable nature and intricate workings, the era of cryptocurrency is firmly established and holds the potential to revolutionize the financial world.