Bitcoin on the verge of $100,000: what is behind the record growth of the cryptocurrency

Bitcoin has approached the symbolic level of $100 thousand, which was facilitated by expectations of positive changes in US legislation and growing investor interest amid support for cryptocurrencies by President-elect Donald Trump, UNN writes with reference to Bloomberg. 

Details

As of 6:02 a.m. on Friday in New York, bitcoin was trading at $98,344, having reached an earlier record high of $99,505. At 13:51, the price of bitcoin was $98,844.12, according to CoinDesk. 

After Trump won the election on November 5, the crypto market grew by about $1 trillion.

The latest developments in the US include the resignation of SEC Chairman Gary Gensler, which is scheduled for January 20, the day of Trump’s inauguration. During Gensler’s tenure, the SEC was active against cryptocurrencies, but the industry expects this policy to soften after the change of power.

Trump’s transition team is considering creating a position to deal with digital assets in the White House. The cryptocurrency industry is eager to establish a direct connection with the president, who is believed to be supportive of the industry’s development.

The mood of change is also felt on Wall Street. For example, Charles Schwab Corp. plans to start spot trading in cryptocurrencies after the emergence of new regulatory rules. In addition, MicroStrategy Inc. is accelerating its bitcoin purchases, and the launch of options on cryptocurrency-related exchange-traded funds has boosted investor optimism.

Bitcoin supporters see the $100,000 mark as a response to skeptics who doubt its value and accuse it of being linked to crime. Despite the fact that bitcoin has more than doubled in price this year, many experts still doubt its feasibility as an investment asset.

“Bitcoin is not something you can value. It’s very volatile, and we think you can have other hedges in your portfolio, such as gold, which have proven to be a much more effective hedge all the time,” said Themis Themistocles, chief investment officer at UBS Wealth Management EMEA.

Since Election Day, U.S. ETFs investing in bitcoin have raised more than $6.8 billion in net funds, according to Bloomberg. The total assets of these funds exceeded $100 billion.

Donald Trump has promised to create favorable conditions for the regulation of cryptocurrencies in the United States and is also considering the idea of creating a strategic bitcoin reserve. However, the timing of these promises and the feasibility of creating a reserve remain uncertain.

Trump used to be skeptical about cryptocurrencies, but he changed his position after digital asset companies invested heavily in his campaign. He also has his own projects related to digital assets.

The growing optimism in the cryptocurrency market has partially overshadowed memories of the 2022 crisis, when market crashes, fraud, and risky practices led to the collapse of platforms such as Sam Bankman-Fried’s FTX exchange. Those events led to increased regulation by the SEC, which is likely to be relaxed under the new president.

Recall 

Earlier , bitcoin reached a new all-time high, continuing its recent growth thanks to optimistic sentiment in the crypto markets. This is due to expectations of more favorable regulation by Donald Trump.

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