Bitcoin surged above $100,000 for the first time on Thursday, a milestone even hailed by skeptics as a coming-of-age moment for digital assets. Investors are betting on a friendly US administration to solidify cryptocurrencies' place in financial markets.
Once Bitcoin broke the $100,000 mark in Thursday's Asian morning, fueled by US President-elect Trump's nomination of pro-crypto Paul Atkins to head the Securities and Exchange Commission, it quickly reached an all-time high of $103,619, a 6% jump on the day. It was last trading at $102,650.
The total value of the cryptocurrency market has nearly doubled this year to a record near $3.8 trillion, according to data provider CoinGecko. For comparison, Apple alone is worth about $3.7 trillion.
Bitcoin's rise from the libertarian fringe to Wall Street has minted millionaires, created a new asset class, and popularized the concept of "decentralized finance" over a volatile and often controversial period since its creation 16 years ago.
Bitcoin has more than doubled in value this year and is up over 50% in the four weeks following Donald Trump's sweeping election victory, which also saw a wave of pro-crypto lawmakers elected to Congress.
"We're witnessing a paradigm shift," said Mike Novogratz, founder and CEO of US crypto firm Galaxy Digital. "Bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream – this momentum is fueled by institutional adoption, advancements in tokenization and payments, and a clearer regulatory path." Trump embraced digital assets during his campaign, promising to make the US the "crypto capital of the planet" and to accumulate a national stockpile of bitcoin.
"We were trading basically sideways for about seven months, then immediately after Nov. 5, US investors resumed buying hand-over-fist," said Joe McCann, CEO and founder of Asymmetric, a Miami digital assets hedge fund.
Bitcoin's supporters cheered Trump's nomination of Atkins to the SEC. A former SEC commissioner, Atkins has been involved in crypto policy as co-chair of the Token Alliance, which works to "develop best practices for digital asset issuances and trading platforms," and the Chamber of Digital Commerce.
"Atkins will offer a new perspective, anchored by a deep understanding of the digital asset ecosystem," said Blockchain Association CEO Kristin Smith. "We look forward to working with him... and ushering in – together – a new wave of American crypto innovation." A slew of crypto companies, including Ripple, Kraken, and Circle, are also vying for a seat on Trump's promised crypto advisory council.
Bitcoin has proven a survivor through steep downturns. Its move into six-figure territory marks a remarkable comeback from a dip below $16,000 in 2022, when the industry was reeling from the collapse of the FTX exchange. Founder Sam Bankman-Fried was later jailed.
Analysts say the growing adoption of bitcoin by large investors this year has been a driving force behind the record-breaking rally. US-listed bitcoin exchange-traded funds were approved in January and have become a conduit for large-scale buying, with over $4 billion flowing into these funds since the election.
"Roughly 3% of the total supply of bitcoins that will ever exist has been purchased in 2024 by institutional money," said Geoff Kendrick, global head of digital assets research at Standard Chartered. "Digital assets, as an asset class, are becoming normalized," he added. "If you fast forward a number of years on trading floors, you'll have a sales and trading desk... which will sit alongside FX and rates and commodities." Bitcoin is already becoming increasingly financialized, with the launch of bitcoin futures in 2017 and a strong debut for options on BlackRock's ETF in November.
Crypto-related stocks have soared along with the bitcoin price. Shares in bitcoin miner MARA Holdings and exchange operator Coinbase were each up around 65% in November. Software firm Microstrategy, which has repeatedly raised funds to buy bitcoin and holds about 402,100 bitcoins as of Dec. 1, has gained around 540% this year.
Trump himself unveiled a new crypto business, World Liberty Financial, in September, though details have been scarce. Billionaire Elon Musk, a major Trump ally, is also a proponent of cryptocurrencies.
The cryptocurrency industry has faced criticism for its massive energy usage, while crypto crime remains a concern, and the underlying technology has yet to deliver a major revolution in global money movement.
The US and Britain announced on Wednesday that they had disrupted a global money laundering ring that used cryptocurrency to help wealthy Russians evade sanctions and launder money for drug traffickers.
Still, as Russian President Vladimir Putin pointed out at an investment conference on Wednesday: "Who can prohibit it? No one." Its longevity is perhaps a testament to a degree of resilience.
"As time goes by, it's proving itself as part of the financial landscape," said Shane Oliver, chief economist and head of investment strategy at AMP in Sydney. "I find it very hard to value it... it's anyone's guess. But it does have a momentum aspect to it, and at the moment the momentum is up."— Reuters
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