Crypto Quill

Bitcoin reached a new all-time high of $103,900 on Thursday, surpassing its previous record of $99,768 from early November, but the cryptocurrency quickly retreated to around $99,200. The milestone comes in the wake of President-elect Donald Trump’s election victory, which is seen as a boost for the digital assets market due to expectations of a more crypto-friendly administration.

Bitcoin’s Rise and Market Impact

Bitcoin’s climb to over $100,000 is largely attributed to the optimism surrounding Trump’s second term and its potential positive impact on cryptocurrencies. Pascal St-Jean, CEO of digital asset investment manager 3iQ, noted that the milestone is significant not just for its psychological value but for the increased likelihood of institutional investments in the crypto sector, as traditional finance becomes more involved.

The surge comes after Trump nominated conservative lawyer Paul Atkins to head the U.S. Securities and Exchange Commission (SEC). Atkins, a known crypto advocate, is expected to take a more lenient approach toward crypto regulation compared to his predecessor, Gary Gensler, who announced his resignation ahead of Trump’s inauguration in January.

Bitcoin and Gold: A Growing Parallel

Federal Reserve Chairman Jerome Powell recently compared Bitcoin to gold, rather than the U.S. dollar, emphasizing Bitcoin’s role as a speculative asset. Powell’s statement, made at the New York Times DealBook Summit, gave Bitcoin added credibility by positioning it as a competitor to gold. According to Joel Kruger, market strategist at LMAX Group, this comparison is a pivotal development, highlighting Bitcoin’s growing legitimacy as a major asset class.

Kruger predicts Bitcoin could continue to rise, projecting a possible overshoot past $100,000 and even reaching $110,000 before the end of the year. Bernstein analysts have a more bullish forecast, projecting that Bitcoin could hit $200,000 by the end of 2025.

Volatility in Crypto Stocks

Despite Bitcoin’s rally, many cryptocurrency-related stocks did not maintain their momentum. Ethereum spiked to nearly $3,944, approaching its 52-week high of $4,090, but it remains below its record of $4,890 from November 2021. Coinbase (COIN), a major crypto exchange, surged by 4% initially, only to reverse and end the day down by 3%.

MicroStrategy (MSTR), a company known for holding large Bitcoin reserves, dropped 4.8% after an early rally. Other Bitcoin mining stocks, including Bitdeer (BTDR), Hut 8 (HUT), and Riot (RIOT), saw mixed results, with early gains fading by the afternoon.

Bitcoin ETFs, such as the iShares Bitcoin Trust (IBIT), also saw volatility, with initial gains of more than 4% before retreating to flat levels. This fading rally in crypto stocks and ETFs highlights the inherent volatility of the market, even in the face of Bitcoin’s landmark achievement.

What’s Next for Bitcoin and Crypto Stocks?

The future for Bitcoin and the broader crypto market looks promising with Trump’s election victory and the anticipated shift in regulatory policies. However, the market’s volatility, particularly in related stocks and ETFs, suggests that while Bitcoin may continue its rise, the broader cryptocurrency market may experience sharp fluctuations.

As institutional and retail investors alike navigate this volatile landscape, analysts remain divided on the sustainability of Bitcoin’s rally. For now, the $100,000 milestone is a significant achievement, but the question remains whether it can maintain its momentum or will face further corrections in the near future.