Bitcoin neared a historic milestone on Thursday, approaching the $100,000 mark for the first time following the election of Republican Donald Trump as the 47th president of the United States.
This political shift has generated optimism among cryptocurrency enthusiasts, who anticipiate a more favourable regulatory environment under the US president-elect’s administration.
During late afternoon trading, Bitcoin fluctuated between $98,000 and $99,000, briefly surpassing $99,073.
The cryptocurrency has more than doubled this year, with a notable 40% increase in just two weeks since Trump’s victory and the election of pro-crypto lawmakers to Congress.
Trump voiced his support for digital assets during his campaign, pledging to position US as the “crypto capital of the planet” and to accumulate a national stockpile of bitcoin.
Crypto investors see an end to increased scrutiny under US Securities and Exchange Commission Chair Gary Gensler, whom Trump has said he will replace.
Trump also unveiled a new crypto business, World Liberty Financial, in September. Although details about the business have been scarce, investors have taken his personal interest in the sector as a bullish signal.
Tech billionaire Elon Musk, a major Trump ally, is also a proponent of cryptocurrencies.
Over 16 years after its creation, bitcoin, which is the world’s largest cryptocurrency, appears on the cusp of mainstream acceptance.
“Everyone who’s bought bitcoin at any point in history is currently in profit,” Alicia Kao, managing director of crypto exchange KuCoin, said.
“But those who bought it early, when there were significant obstacles to doing so and there was the might of the world’s financial and governmental forces intent on crushing it, are the real winners. Not because they’re rich, but because they’re right.”
Bitcoin’s rebound from a slide below $16,000 in late 2022 has been rapid, boosted by the approval of US-listed bitcoin exchange-traded funds (ETFs) in January this year.
The Securities and Exchange Commission had long attempted to block ETFs from investing in bitcoin, citing investor protection concerns, but the products have allowed more investors, including institutional investors, to gain exposure to bitcoin.
Crypto-related stocks have soared along with the bitcoin price on Thursday.
“Once you break out to new highs, you attract a lot of new capital,” John LaForge, head of real asset strategy at Wells Fargo Investment Institute, said.
“It’s like gold in the 1970s, where this new high is in a price discovery mode. You don’t know how high it’s going to go,” he said.
Yet the rise is not without critics.
Two years ago, the industry was wracked by scandal with the collapse of the FTX crypto exchange and the jailing of its founder Sam Bankman-Fried.
The cryptocurrency industry also has been criticised for its energy usage, with miners under scrutiny over their potential impact on power grids and greenhouse gas emissions due to their energy-intensive operations.
Crypto crime also remains a concern, with an analysis by crypto researchers Chainalysis finding that at least $24.2 billion worth of crypto was sent to illicit wallet addresses last year, including addresses identified as sanctioned or linked to terrorist financing and scams.
