Bitcoin (BTC-USD) soared past the significant $100,000 mark on Wednesday evening, reaching a new all-time high before retracting slightly on Thursday afternoon. This remarkable rally is fueled by expectations that President-elect Donald Trump’s administration will foster a regulatory environment favorable to cryptocurrencies.
Bitcoin’s value has surged by over 40% since Trump’s election victory in November, consistently nearing the $100,000 threshold. On Thursday, the cryptocurrency briefly exceeded $103,000 before experiencing a pullback.
Early Thursday, Trump celebrated this milestone on Truth Social, acknowledging the contribution of his election to the cryptocurrency’s rally. He welcomed crypto enthusiasts and reiterated his commitment to “Make America Great Again.”
The recent surge in Bitcoin’s price followed Trump’s appointment of Paul Atkins as chair of the Securities and Exchange Commission (SEC). Atkins, CEO and founder of Patomak Global Partners and a former SEC commissioner, is widely perceived as a pro-cryptocurrency figure. Trump lauded Atkins as a champion of “common sense regulations” and someone who recognizes the importance of digital assets and innovation for America’s future.
On Wednesday, Democratic Senator Kirsten Gillibrand of New York affirmed Atkins’s relevant experience for crafting federal crypto legislation, suggesting he could be an effective SEC head.
Investor confidence in crypto-friendly policies further strengthened last month with the announcement of SEC Chair Gary Gensler’s resignation, effective January 20th, coinciding with the president-elect’s inauguration. Gensler’s tenure was marked by a stringent approach towards the crypto industry, leading to anticipation that his successor would adopt a less regulatory stance. Owen Lau, executive director and senior analyst at Oppenheimer, highlighted this potential shift as a significant move from focusing on security law violations to embracing crypto capital.
Bitcoin has become a central element of the “Trump trade,” driven by his campaign pledges, including the establishment of a national bitcoin reserve. Reports suggesting Trump’s transition team is considering a new White House position, a “crypto czar,” to oversee bitcoin policy have also contributed to the cryptocurrency’s price surge.
Furthermore, last month’s Financial Times report indicating advanced talks between Trump Media & Technology Group (DJT) and crypto trading platform Bakkt (BKKT) for a potential acquisition has further bolstered positive sentiment within the sector.
The recent substantial inflows into Bitcoin spot exchange-traded funds (ETFs) have also propelled prices upward. The commencement of trading for options linked to BlackRock’s spot bitcoin ETF (IBIT) on the Nasdaq in November further amplified trading activity in the crypto space.
Despite the prevailing optimism, Oppenheimer’s Lau cautioned investors about potential volatility following this significant price milestone, advising vigilance at the $100,000 level and anticipating potential selling pressure as investors seek the next breakout point.
