Crypto Quill

Bitcoin is edging closer to the coveted $100,000 mark, spurred by optimism surrounding future US crypto regulations and a surge in investor interest, partially fueled by President-elect Donald Trump’s support for digital assets. As of Friday, Bitcoin traded up by 1.2%, reaching $99,353, coming within striking distance of the psychological milestone. The broader cryptocurrency market has also seen a significant $1 trillion surge in value since Trump’s election win earlier this month.

US Crypto Regulations Take a Positive Turn

A key driver behind Bitcoin’s rally is the changing regulatory landscape in the US. One of the most anticipated developments is the impending exit of Securities and Exchange Commission (SEC) Chair Gary Gensler, set for January 20, 2025, when Trump is inaugurated. Gensler’s tenure was marked by a strict stance on crypto regulation, with numerous enforcement actions against the industry. His departure is seen by many as a signal that the regulatory environment for cryptocurrencies may become more favorable under Trump’s administration.

Trump’s team has reportedly been exploring the possibility of establishing a new White House position dedicated specifically to digital-asset policy. This move reflects the growing recognition of cryptocurrency’s role in the financial ecosystem, with Trump himself increasingly positioning as a crypto ally.

Wall Street’s Shifting Attitude

This regulatory shift is already making waves on Wall Street. Major firms like Charles Schwab Corp. have announced plans to enter the crypto space, with incoming CEO Rick Wurster confirming that the firm intends to offer spot crypto trading once the regulatory environment becomes clearer. Additionally, MicroStrategy, a well-known Bitcoin accumulator, has signaled its intention to increase its Bitcoin holdings significantly. The launch of Bitcoin options on US-based exchange-traded funds (ETFs) is also boosting sentiment, further driving the market’s momentum.

Momentum Rally Toward $100,000

Despite the market’s underlying changes, much of Bitcoin’s recent price movement is attributed to momentum. As noted by Chris Weston, head of research at Pepperstone Group, Bitcoin’s rise toward $100,000 is largely driven by a “momentum rally.” The $100,000 level is acting like a “magnet” for Bitcoin, drawing in both retail and institutional investors who see the milestone as symbolic of the cryptocurrency’s growing legitimacy.

The rise in Bitcoin’s value this year has been impressive, more than doubling in price. Many Bitcoin advocates see the $100,000 threshold as a key indicator of Bitcoin’s potential as a modern-day store of value, challenging critics who dismiss crypto as volatile and impractical.

Critics Question Bitcoin’s Long-Term Role

Despite Bitcoin’s rapid ascent, there are still voices of caution within the investment community. Themis Themistocleous, EMEA chief investment officer at UBS Wealth Management, expressed skepticism about Bitcoin’s place in investment portfolios. He pointed out Bitcoin’s extreme volatility, suggesting that traditional assets like gold remain a more reliable hedge against market uncertainty.

“Bitcoin is not something you can value,” Themistocleous said on Bloomberg Television. “It’s very volatile, and we think you can have in your portfolio other hedges like gold, that all the time prove to be a much more effective hedge.”

However, Bitcoin advocates argue that its increasing institutional adoption and growing recognition as a store of value could cement its place in diversified portfolios in the years ahead.