Bitcoin reached new heights as it surpassed $99,000 for the first time, marking an extraordinary rally that has seen the cryptocurrency surge over 40% in just two weeks. This milestone comes merely two years after Bitcoin's dramatic fall below $17,000 during the FTX exchange collapse.
The digital currency's remarkable ascent coincides with growing optimism in the crypto industry following the recent US presidential election results. Market participants anticipate a more favorable regulatory environment under the incoming Trump administration.
As of Friday afternoon, Bitcoin was trading at $99,526, according to CoinDesk data, positioning itself at the threshold of the historic $100,000 mark.
The surge appears driven by multiple factors. Trump's campaign promises to make the United States "the crypto capital of the planet" and establish a "strategic reserve" of Bitcoin have energized investors. The former president's evolving stance on cryptocurrency, evidenced by his acceptance of crypto donations and participation in Bitcoin conferences, has further bolstered market confidence.
Another key factor propelling Bitcoin's rise is the unprecedented success of spot Bitcoin ETFs, which saw record inflows post-election. Trading volumes reached $6 billion in the election week alone, reflecting growing institutional interest in cryptocurrency investments.
The recent "halving" event in April, which reduced the reward for mining new Bitcoin by 50%, may also contribute to upward price pressure by affecting supply dynamics.
However, market analysts advise caution. David Glass, a Citi macro strategist, notes that cryptocurrency's evolution is "not necessarily a short-term story" and emphasizes the complexity of implementing regulatory changes.
The anticipated leadership change at the Securities and Exchange Commission (SEC) could reshape crypto regulation. The current SEC chair Gary Gensler, known for his stringent oversight of cryptocurrencies, will step down in January when Trump takes office.
While optimism runs high, experts remind investors of cryptocurrency's notorious volatility. Bitcoin's history includes dramatic price swings, from $5,000 during early pandemic days to nearly $69,000 in late 2021, before plummeting during the FTX collapse.
Environmental concerns persist regarding Bitcoin mining's energy consumption. Recent research from the United Nations University revealed that Bitcoin mining in 2020-2021 produced emissions equivalent to burning 84 billion pounds of coal, though industry advocates point to increasing adoption of clean energy sources.
As Bitcoin approaches this historic milestone, market participants remain divided on its future trajectory, highlighting both unprecedented opportunities and inherent risks in cryptocurrency investment.