Bitcoin continues its meteoric rise, trading at $98,550 early Friday in Singapore, after touching a record $99,000 in the US on Thursday. The rally is fueled by renewed investor confidence following Donald Trump’s pro-crypto election win and expectations of friendlier US regulations.
Key Drivers Behind Bitcoin’s Surge
- Regulatory Optimism:
- SEC Chair Gary Gensler’s resignation on January 20 coinciding with Trump’s inauguration is expected to signal a lighter regulatory approach.
- Trump’s transition team is reportedly exploring the creation of a White House digital-asset policy post, which could provide direct support to the crypto industry.
- Institutional Momentum:
- Charles Schwab announced plans to offer spot crypto trading once regulatory clarity improves.
- MicroStrategy, a major Bitcoin proponent, plans to accelerate its BTC acquisitions.
- US Bitcoin ETFs have seen $5.9 billion in inflows since Election Day, pushing total assets to a record $100 billion.
- Market Sentiment:
- Analysts view Bitcoin’s potential to reach $100,000 as a symbolic victory over skeptics, reinforcing its status as a modern-day store of value.
Bitcoin’s Role in Portfolios Remains Divisive
While Bitcoin’s price has more than doubled in 2024, skepticism persists about its utility and volatility. Critics, like UBS Wealth Management’s Themis Themistocleous, argue that traditional hedges like gold remain more effective. However, proponents see Bitcoin as a revolutionary tool for decentralization and a hedge against fiat currency instability.
Challenges and Opportunities
Although optimism is high, memories of the 2022 crypto market collapse—which exposed fraud and led to regulatory crackdowns—still loom. Trump’s promises of a strategic Bitcoin reserve and a supportive regulatory framework are viewed positively, but their implementation timeline remains uncertain.
Outlook
Bitcoin’s rally reflects both investor enthusiasm and institutional validation. With Trump’s presidency likely to usher in a crypto-friendly era, market participants are optimistic about continued growth and innovation in the digital asset space.
