The price of Bitcoin reaching $100,000 marks a significant milestone for the cryptocurrency world, moving from an idea rooted in cypherpunk ideology to being recognized in the financial mainstream.
Bitcoin, once considered a niche asset for a small group of technology enthusiasts, has steadily increased in value over the years. It started at $1 in 2011, reached $1,000 in 2013, and has now surpassed the highly anticipated six-figure mark in 2024.
The recent increase in Bitcoin's value shows how it has transformed from an initial experiment to a recognized and valuable financial asset on a global scale.
However, reaching $100,000 was not an easy journey for the cryptocurrency. Despite being pronounced "dead" multiple times, it managed to bounce back each time.
According to Mikko Ohtamaa, co-founder of Trading Strategy, there is a limited window of opportunity of two to three years to demonstrate the positive impact of cryptocurrency on the world. This is seen as the last opportunity for crypto to make a significant change, with favorable conditions in its favor.
Over the past decade, there has been a lot of guesswork in the market. It is now important to shift focus from guessing to actual practical use in the real world. This current surge in prices is notable because of certain distinct factors.
Today, Bitcoin is seen as more than just a risky investment. It is considered a safe place to store value, a way to protect against rising prices, and a type of investment that is gaining popularity among institutional investors.
Origin: Cynthia Lummis
ETFs that are based on specific spots have become more easily accessible in countries like the United States and Hong Kong. The election of Donald Trump, who supports cryptocurrencies, as the US president has provided a favorable environment for the cryptocurrency industry to thrive.
Associated: Report predicts that the adoption of cryptocurrencies is expected to reach 8% by the year 202
During his campaign, Trump vowed to appoint a new Securities and Exchange Commission Chair to replace Gary Gensler. Gensler is known for his tough regulatory stance in the cryptocurrency industry, which has made him unpopular among some.
Investors are optimistic that this change could lead to less obstacles from regulations, creating a more welcoming atmosphere for cryptocurrency assets. Gensler's time in office, characterized by a strategy of enforcing regulations, has faced criticism from the industry for not providing clear legal guidelines.
The road to reaching $100,000 for Bitcoin was not straightforward. It has been a journey filled with unpredictable price fluctuations, sudden market downturns, 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. The closure of Mt. Gox, the biggest Bitcoin exchange in the world at the time, had a major impact on this period. Even now, ten years later, the payout to creditors of Mt. Gox is still being discussed in the news.
By the end of 2017, the price of Bitcoin soared to almost $20,000 due to the popularity of initial coin offerings (ICOs). However, government regulations quickly became stricter, with the US considering ICOs to be unregistered securities and China completely prohibiting them. As a result, by December 2018, the price of Bitcoin had dropped significantly to $3,200.
Recent research reveals that a large majority of Initial Coin Offerings (ICOs) carried out in 2017 were fraudulent
Bitcoin experienced another significant increase in value in 2021, reaching $63,000. This was partly due to the involvement of institutions and well-known companies like Tesla, led by Elon Musk, which contributed to driving up the price of Bitcoin.
Origin: Arkham Intelligence
However, excitement was diminished once more due to regulatory pressure. China implemented strict measures on Bitcoin mining, causing the price to plummet to $29,000. After reaching a peak of $69,000 in November 2022, Bitcoin experienced a significant decline to $15,000 amidst turmoil in the broader cryptocurrency industry, which included FTX's collapse, Three Arrows Capital's downfall, and the crisis involving the Terra-Luna stablecoin.
In 2024, Bitcoin has made a strong comeback. The SEC's approval of spot Bitcoin ETFs in January has allowed more people to participate in the market, and Trump's election in November has further boosted the rally.
According to market analyst Justin d'Anethan, the current driving forces behind Bitcoin are the increased accessibility through ETFs, interest from corporations, and growing investments from institutions worldwide. Additionally, the move away from the US dollar in BRICS economies is also contributing to the appeal of Bitcoin as a potential hedge against traditional reserve currencies in a changing global financial landscape.
The value of $100,000 for Bitcoin holds significance beyond just being a numerical figure. It serves as a psychological milestone for supporters of Bitcoin, symbolizing their unwavering belief in the cryptocurrency after years of enthusiastic support. This is evidenced by the trend of Bitcoin advocates using laser-eyed profile pictures on social media to showcase their confidence in Bitcoin reaching this milestone.
However, as d'Anethan clarified, the end goal is not just $100,000.
In the last year, the increase in Bitcoin has mainly been influenced by experienced investors such as corporate treasuries (especially MicroStrategy), the emergence of ETFs, and pension funds beginning to invest in BTC without much attention.
Individual investors have not yet invested heavily, but when they do, the excitement will likely push the price beyond $100,000.
The Trump campaign also suggested creating a Bitcoin reserve, which has received varying responses.
Author: Ed Krassenstein/Impure Hoonter
There are differing opinions on whether the move is a step towards centralization or not. Quary, founder of the Bitcoin marketplace Magisat, believes that it does not affect Bitcoin's decentralized principles.
Quary explained to Cointelegraph that the ownership of Bitcoin does not have any significant impact on the network.
It is hoped that both the US and BRICS countries have a shared interest in Bitcoin and hold significant investments in it. The ideal situation would be a decentralized network where all parties can participate without bias. As for the future of Bitcoin, reaching $100,000 is seen as a significant milestone, but for many, it signifies the start of a bigger journey for Bitcoin.
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 risky investments.
According to d'Anethan, unless there is a significant sell-off due to bankruptcies in 2022 or an unexpected event, it seems likely that the market will continue to rise.
Nevertheless, looking at past events, Bitcoin's path typically does not follow a consistent upward trend. Corrections are probable, even during times of positive growth.
Article: Artificial intelligence may be consuming more energy than Bitcoin and is posing a threat to Bitcoin mining operations.
With changes in economic powers and financial policies, Bitcoin has shifted from being a specialized asset to becoming a legitimate option for financial transactions.
Bitcoin reaching $100,000 is a strong indication that cryptocurrency is becoming a permanent fixture in the financial world. It serves as a protection against inflation, a secure asset, and a representation of financial independence. This milestone highlights the enduring presence of cryptocurrency, despite its fluctuating value, intricate nature, and ability to bring about significant changes.