What will happen to Bitcoin after the 100,000 mark?
Published: Wednesday, Dec 18th 2024, 12:20
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Everyone is talking about the cryptocurrency Bitcoin again. After an initial exclamation mark in the spring, the election of Donald Trump led to a veritable price explosion towards the end of the year. According to market observers, the breakthrough of the 100,000 dollar mark was not yet the end of the road for the "crypto lead currency".
Bitcoin started the year 2024 at a good 42,000 dollars. In anticipation of the fourth halving, in which the number of new bitcoins per block is halved, the blockchain currency rose to just over 73,000 dollars by mid-March, surpassing the previous all-time high from 2021.
However, the high hopes for further price gains were not fulfilled for a long time, and at the beginning of September the price even fell below USD 54,000 at times. This was followed by an impressive record run at the end of the fall, which has continued to this day. As of Wednesday, the current all-time high is 108,364 dollars.
ETF rocket ignited
Bitcoin's record run was certainly helped initially by the approval of spot ETFs in the US. Long awaited, the instruments were approved by the US Securities and Exchange Commission (SEC) in the spring, creating new regulatory clarity for institutional investors in particular.
According to traders, this led to a "massive" increase in institutional demand and strengthened Bitcoin's position as an asset class. The approval of ETFs has certainly taken off: as of mid-December, almost 37 billion dollars had flowed into the largest ETF investment vehicles from Blackrock and Co. One year after the introduction of ETFs on gold in the USA at the end of 2004, assets under management amounted to around one billion dollars.
Trump creates euphoria
The second key driver in 2024 was the re-election of Donald Trump as President of the USA. Formerly a critic, Trump ensnared the "crypto-affine" electorate during the election campaign with grand promises about the "crypto nation" USA.
Trump managed to establish himself as a supporter of cryptocurrencies, in part because he has "crypto-friendly" supporters such as Vice President J.D. Vance at his side. At the beginning of December, the US President-elect also announced that he would appoint venture capitalist David Sacks as the government commissioner for artificial intelligence and cryptocurrencies.
Both topics are "critical to America's future competitiveness", Trump announced via his online mouthpiece Truth Social. Sacks is also a confidant of tech billionaire Elon Musk, who has already made headlines in connection with the "meme" token Doge.
Forecasts for 2025
The crypto community therefore has every reason to be happy at the moment. Critical voices can hardly be heard at the moment or are silenced in the noise of the prevailing euphoria.
However, the constant admonishers continue to point out that regulatory and technical risks are part of Bitcoin's everyday life. It would not be the first time that Bitcoin has reacted volatile in the face of bad news. If, for example, technical problems or security gaps at a major trading exchange were to shake investor confidence again, massive price losses are possible.
For the time being, however, the outlook for 2025 remains characterized by optimism. Many analysts expect Bitcoin to hold the psychologically important USD 100,000 mark, supported by a strong institutional commitment and the continued decline in supply.
For example, the crypto experts at 21Shares refer to the company MicroStrategy. The US software developer under its CEO Michael Saylor has continued to increase its holdings in 2024. The company is now sitting on unrealized profits of over 8 billion dollars. "In 2025, other institutions could follow MicroStrategy's example," says the 21Shares report.
The use of Bitcoin in payment transactions could also increase, particularly in countries with high inflation, where Bitcoin is increasingly seen as an alternative to the national currency. For example, an actual announcement by the future US government to include Bitcoin in the national finances could trigger a further wave of purchases.
"Around 180,000 dollars"
So it's that time of year again when various "experts" are outdoing each other with ever higher forecasts. The possibility of a Bitcoin being traded at a value of one million dollars is once again doing the rounds.
"Many things that were unthinkable just a few weeks ago are now within the realm of possibility," says Dominic Weibel, Head of Research at Bitcoin Suisse. He himself hardly thought it possible, for example, that a state Bitcoin reserve would be seriously discussed in the US.
At Bitcoin Suisse, the expectations are not quite as high: the crypto asset manager's team of experts assumes that the new all-time high of the current upward cycle will be around 180,000 dollars, at least in the medium term.
Wiebel's team also assumes that the Bitcoin price will be less volatile. It is already apparent that volatility is on a downward trend compared to technology stocks, for example.
This is a consequence of the institutional acceptance of the cryptocurrency. At the same time, however, the progressive penetration of Bitcoin into the traditional financial world is limiting its upside potential.
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