Bitcoin’s value surged to a record high of $98,000 on Thursday, marking a 40 percent increase since the presidential election two weeks ago. This is likely to bring the cryptocurrency to the brink of the $100,000 milestone, a never before seen record.
The recent rally is largely attributed to expectations that the incoming Trump administration will adopt a more favorable stance toward cryptocurrencies, compared with the Biden administration.
President-elect Donald Trump has pledged to make the United States “the crypto capital of the planet” and has proposed the creation of a strategic bitcoin reserve.
His campaign’s acceptance of cryptocurrency donations and his participation in a bitcoin conference in July further suggested a newfound interest in courting the industry.
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Will Bitcoin Hit $100,000 in 2024?
Several experts told Newsweek this week there’s a widespread agreement on bitcoin eventually reaching $100,000. But there’s a split between those who see it happening in 2024 versus early 2025, when Trump will be inaugurated.
Trump has expressed intentions to quickly remove Securities and Exchange Commission Chairman Gary Gensler, known for his crackdowns on cryptocurrencies. This potential leadership change is anticipated to lead to more lenient regulations.
Changes to policies of this kind will also affect Trump on a personal level. His new cryptocurrency venture, World Liberty Financial, went live last month with hopes of raising $300 million.
His opinion on digital assets differs greatly from what he said during his first term in the White House.
“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” he wrote on X (formerly Twitter) in 2019.
Two years later, he told Fox Business that bitcoin “just seems like a scam.”
Experts suggest his opinion shift will produce a crypto high that those with hefty digital currency wallets will want to chase.
“Another kick higher should bring in a fresh chase from those who like to buy what’s strong,” according to Chris Weston, head of research at Australian online broker Pepperstone.
Not a ‘Short-Term’ Solution, Experts Argue
The approval of spot bitcoin exchange-traded funds (ETFs) by U.S. regulators in January has also played a significant role in bitcoin’s ascent.
These ETFs have provided investors with a new way to gain exposure to bitcoin, contributing to increased demand and trading volumes. Notably, bitcoin ETFs recorded $6 billion in trade volume during the week of the election alone.
Despite the bullish sentiment, experts caution about the inherent volatility of cryptocurrency markets. David Glass, a macro strategist at Citi, said, “This is not necessarily a short-term story. It’s likely a much longer-term story.”
Environmental concerns also persist, particularly regarding the energy-intensive process of bitcoin mining. Recent research published by United Nations University and the journal Earth’s Future found that the carbon footprint of 2020-2021 bitcoin mining across 76 nations was equivalent to the emissions from burning 84 billion pounds of coal or running 190 natural gas–fired power plants.
Coal satisfied the bulk of bitcoin’s electricity demands (45 percent), followed by natural gas (21 percent) and hydropower (16 percent).
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Did the Market Expect Trump to Win the Election?
Gains in cryptocurrency can evaporate just as quickly as they’re made.
At the onset of the COVID-19 pandemic in early 2020, bitcoin was trading at just over $5,000. To many, the once-euphoric hype felt very much unsupported.
Fueled by heightened demand for tech-driven assets, bitcoin’s value surged to nearly $69,000 by November 2021. Federal Reserve interest rate hikes––introduced to bring down inflation––were influential in dragging bitcoin’s value down to $17,000. The collapse of FTX, a bankrupt cryptocurrency exchange and crypto hedge fund, didn’t help matters either.
Bitcoin’s renewed momentum is not entirely unexpected. But experts at Kaiko say that a surge of this kind indicates the “sharp upward move” seen in the weeks following Trump’s win “suggests the market had not clearly and fully anticipated a Republican victory.”
This article includes reporting from the Associated Press.
