Bitcoin Price Exceeds $100K for the First Time in History
The Bitcoin exchange rate exceeded $4 by the evening of December 100, ending a period of steady price growth during which the original cryptocurrency has grown by more than 000% since the US presidential election. The publication explains the reasons for this axes
Photo: Mykhailo Polenok | Dreamstime.com
This big round number marks the next stage of the industry’s long-term growth. Digital assets, and Bitcoin in particular, have never looked so promising.
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ETFs launched in January now hold over $100 billion in assets, making it easier than ever to buy Bitcoin or Ethereum. (ETFs, or Exchange-Traded Funds, are funds that, like stocks, are bought and sold on a stock exchange. Unlike traditional mutual funds, which are bought and sold at the closing price of the day, ETFs can be bought and sold during the trading day at the current market price. This allows investors to easily trade assets and diversify their holdings. – Approx. Ed.)
Wall Street, once an enemy of cryptocurrencies, has become a key ally by increasing the asset's survival.
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Clear regulation of cryptocurrency in the US (once a pipe dream) is now inevitable.
Here, some clarification is needed. The post of head of the SEC (the US Securities and Exchange Commission is a federal agency that regulates financial markets and protects the interests of investors. – Approx. Ed.) Donald Trump's administration is considering several cryptocurrency-friendly candidates. One of the most talked about candidates is Paul Atkins, a former SEC commissioner under President George W. Bush. His support for cryptocurrency technology makes him an ideal candidate for the job as Trump actively aligns his team with a more crypto-friendly political environment.
Other candidates, such as Brad Bondy and Brian Brooks, also support cryptocurrencies and are considered potential SEC leaders. Brooks, for example, was previously the head of the legal department at Coinbase and has been a vocal lobbyist for more lenient regulation of cryptocurrencies.
This points to the possibility that the US presidential administration will support cryptocurrencies at the highest level, perhaps through the appointment of cryptocurrency supporters to key government positions or through official policy initiatives. This could mean that the administration will take steps to improve regulation of cryptocurrencies and create a more favorable environment for their development.
The excitement over what Donald Trump will do for cryptocurrency has added fuel to the bull run (a period of sustained growth. – Approx. Ed.) of Bitcoin, which was already on the move. But Bitcoin reaching $100 is not just a Donald Trump effect.
This is a remarkable achievement during the fourth of Bitcoin's remarkably predictable "cycles," which we'll cover in more detail later.
And while a six-figure Bitcoin in 2024 wasn't exactly predictable, it's still a figure traders had their sights set on long before Trump declared his love for the cryptocurrency in May.
What is the "Bitcoin Four-Year Cycle"
Bitcoin is once again following the four-year cycle it has exhibited since 2013.
Every four years, the number of new bitcoins created each day is halved, reducing the liquidity supply. Once this is felt in the market, the price begins to rise. (Warning: Most get-rich-quick scams inevitably fail.)
But the "Trump effect" certainly accelerated Bitcoin's rise to today's new high.
On Deribit, a leading crypto options exchange, people were already betting $100 on Bitcoin, but activity has increased dramatically since the election.
Risks
New investors face many risks. Here are some of them:
If the next Congress will not be able to pass new legislation related to blockchain;
If The SEC won't soften its stance on cryptocurrency under the new administration (though that seems less of a risk after Paul Atkins' nomination to head the agency);
If the newly elected president will change his mind and start selling the country's bitcoin assets.
Any of these situations would likely slow down or even stop the positive momentum in Bitcoin's price.
What goes up always comes down eventually.
It is highly likely that retail traders have piled into Bitcoin and other cryptocurrencies again in search of quick money, as they did in previous cycles. How far will Bitcoin fall at the end of this cycle is the question.
Historically, Bitcoin has fallen sharply from the highs of the previous three cycles, typically back to around the peak of the previous cycle's prosperity.
After peaking just below $70 in 000, BTC eventually fell back to around $2021 — right where it peaked in the cycle that ended in 20.
However, each crypto boom cycle has been driven not only by a halving, but also by some additional new technology that got people excited. In 2017, it was initial coin offerings; in 2021, it was non-fungible tokens.
(Again, a clarification is needed here. Halving is a process in which the reward for mining new blocks on the Bitcoin network is cut in half. Halvings occur approximately every four years, or after 210 blocks have been mined on the network. This event reduces the amount of new bitcoins that enter circulation and has an impact on the market because it reduces the inflation rate of the cryptocurrency.
Initial Coin Offerings (ICOs): In 2017, crypto startups began actively conducting ICOs (Initial Coin Offerings) - something like an initial public offering (IPO), but for cryptocurrencies. Startups sold their tokens or coins to investors to raise money to launch new projects. This was a way to attract funding, but it also became risky because many of these projects turned out to be scams or failed.
Non-fungible tokens (NFT): In 2021, NFTs have come to the forefront — unique digital items like artwork, collectibles, videos, or photographs that can be bought and sold. These tokens are linked to the blockchain and ensure that each item is unique and cannot be replaced with the exact same one (hence “non-fungibility”). For example, you can buy a unique digital painting or video, and this token will be proof of your ownership of the work.
Thus, in 2017, the main trend was cryptocurrency startups and their coin offerings, and in 2021, it is unique digital assets such as NFTs).
This time things could be different
If Bitcoin's next bear market (i.e. period of decline) ends without it losing 80-90% of its value from its peak (let's say more like 50%), we'll know something has changed, possibly forever.
The arrival of institutional investors such as government pension funds, deep-pocketed companies such as MicroStrategy and Block, Inc., and nation-states such as Bhutan and El Salvador could soften the next decline.
Bitcoin's market cap now makes it the 7th-largest asset in the world — higher than Tesla, Meta (Facebook), and even silver. It's approaching the value of Amazon and Alphabet.
This puts the original cryptocurrency in a completely new position and could help mitigate the strong volatility (the degree of price fluctuation) that has always characterized this asset class, making more people comfortable including it in their portfolio.
Сonclusion
In May 2010, a programmer spent 10 bitcoins to order delivery of two large Papa John's pizzas.
Today, 10 BTC (worth $000 billion) would buy you almost 1% of Papa John's International.
Bitcoin at $100 is a significant psychological barrier and symbolic milestone that marks the possible transition of the cryptocurrency industry to the next stage of long-term growth.
The rise in price is not only due to the influence of politicians like Donald Trump, but also due to the cyclical nature of Bitcoin. Every four years, the supply of new coins is cut in half, reducing the liquid supply and driving up the price.
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