SINGAPORE/LONDON: Bitcoin’s march toward $100,000 gathered pace on Thursday, as expectations mounted for a friendlier US regulatory approach under President-elect Donald Trump, marking a stunning rebound for an asset many investors still regard with scepticism.
The bitcoin price topped $98,000 for the first time during European trading and was last up around 2.4 per cent at $96,779.
Bitcoin has more than doubled in value this year and is up about 40 per cent in the two weeks since Trump was voted in as the next US president and a slew of pro-crypto lawmakers were elected to Congress.
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Over 16 years after its creation, bitcoin appears on the cusp of mainstream acceptance.
“Everyone who’s bought bitcoin at any point in history is currently in profit,” Alicia Kao, managing director of crypto exchange KuCoin, said.
“But those who bought it early, when there were significant obstacles to doing so and there was the might of the world’s financial and governmental forces intent on crushing it, are the real winners. Not because they’re rich, but because they’re right.”
Trump embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet” and to accumulate a national stockpile of bitcoin.
Bitcoin’s rebound from a slide below $16,000 in late 2022 has been rapid, boosted by the approval of US-listed bitcoin exchange-traded funds in January this year.
The Securities and Exchange Commission had long attempted to block ETFs from investing in bitcoin, citing investor protection concerns, but the products have allowed more investors, including institutional investors, to gain exposure to bitcoin.
CRYPTO RUSH
More than $4 billion has streamed into US-listed bitcoin exchange-traded funds since the election. This week, there was a strong debut for options on BlackRock’s ETF with call options – bets on the price going up – more popular than puts.
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Crypto-related stocks have soared along with the bitcoin price and shares in bitcoin miner MARA Holdings were up nearly 2.3 per cent on Thursday.
“Once you break out to new highs, you attract a lot of new capital,” John LaForge, head of real asset strategy at Wells Fargo Investment Institute, said.
“It’s like gold in the 1970s, where this new high is in a price discovery mode. You don’t know how high it’s going to go,” he said.
MicroStrategy a loss-making software company that has been buying bitcoin, was down 2.5 per cent after its market cap had earlier surpassed $100 billion. Its share price has more than doubled since the day of the election.
The company’s CEO Michael Saylor has positioned himself as one of the biggest proponents of bitcoin and cryptocurrencies, alongside Trump-ally Elon Musk.
“Many are wondering if this administration will bring the regulatory clarity the crypto community has been waiting for. It’s likely too soon to say,” said Will Peck, head of digital assets at WisdomTree, a global exchange-traded fund issuer.
“We see all of this excitement as bullish not only for bitcoin or crypto broadly, but the entire blockchain-enabled ecosystem that is growing today.”
Yet the rise is not without critics.
Two years ago, the industry was wracked by scandal with the collapse of the FTX crypto exchange and the jailing of its founder Sam Bankman-Fried.
The cryptocurrency industry also has been criticized for its energy usage, with miners under scrutiny over their potential impact on power grids and greenhouse gas emissions due to their energy-intensive operations.
Crypto crime also remains a concern, with an analysis by crypto researchers Chainalysis finding that at least $24.2 billion worth of crypto was sent to illicit wallet addresses last year, including addresses identified as sanctioned or linked to terrorist financing and scams.