Is Bitcoin’s $100k milestone just the beginning of a rise?

Six years ago, bitcoin enthusiasts who argued it would cost $100,000 were considered avant-garde. Such a forecast for a cryptocurrency created by an anonymous founder and lacking central authority seemed absurd until Donald Trump won this year’s presidential elections in the United States.

According to coinmarketcap.com, on 22 November, bitcoin was about $344 short of reaching $100,000. Over the weekend, the cryptocurrency slightly lost value—on Sunday evening, it was about $96,000, which is 3.6% less than on Friday. On Monday, the price climbed back above $98,000.

– According to my assumptions, by the end of this year, the price of Bitcoin could rise even to $120,000. However, 2025 will be a year of trial for the cryptocurrency – predicts Daniel Kostecki, chief market analyst at CMC Markets Poland, in an interview with money.pl.

The Fed, the US central bank, intends to keep interest rates relatively high next year, which could, in Kostecki's opinion, dampen the enthusiasm of Wall Street investors. As promised by Donald Trump during the election campaign, the establishment of a strategic reserve in cryptocurrency could counterbalance the decline in bitcoin prices, adds the analyst.

The state would need to raise funds to purchase bitcoins through bond issuance or from the pockets of American taxpayers, which might sustain demand for the cryptocurrency. However, our interlocutor claims that it's unclear how the public will react if the state actually aims to spend billions of dollars on bitcoin purchases.

It's estimated that about 200,000 bitcoins, mainly confiscated, are in the American government's reserves. According to Trump's announcements, in five years, they aim to have as many as one million, which is about 5% of the total cryptocurrency supply (21 million pieces).

During the presidential campaign, the Republican stated at rallies that he wanted to make the United States the world capital of cryptocurrencies. That was enough to attract significant capital to the Bitcoin market, but the rally began when it turned out Trump won the election. On Thursday, 7 November, a record $1.4 billion flowed into ETFs (Exchange Traded Funds) investing in this cryptocurrency, with as much as 81% of this amount going to iShares Bitcoin Trust, a fund managed by BlackRock.

These spot investment funds reflect the current market value of Bitcoin and enable investors to buy shares through the traditional exchange. This avoids direct involvement in the cryptocurrency market. The first such ETFs were created in the United States this year after years of waiting for the American regulator’s approval.

The rapid development of bitcoin ETFs will contribute to an influx of new institutional investors. These factors create ideal conditions for reaching new peaks, suggests Thomas Perfumo, strategic director at Kraken – a cryptocurrency exchange from San Francisco, California, when asked by money.pl.

In giving the market the green light to launch spot funds in January 2024, Gary Gensler, head of the Securities and Exchange Commission (SEC), emphasised that it does not imply support for Bitcoin. The point is that his days as Commission chairman are numbered. A few days ago, Gary Gensler announced he would step down on 20 January, when the president-elect's administration takes office, thereby ending a term in which he became known for a stringent policy towards the virtual currency industry, anticipating Donald Trump’s move, who threatened to dismiss him once he assumes the presidency of the United States.

In just under three weeks, counting from 6 November, bitcoin's market capitalisation increased by almost $600 billion overall, reaching nearly $2 trillion. Recent days have been favourable for the cryptocurrency's rate, not only due to the news about Gensler but also unofficial Bloomberg reports that the president-elect's team is negotiating with the digital asset industry about creating a new position in the White House, purely dedicated to cryptocurrency policy.

According to Bloomberg sources familiar with the matter, the person in this position would oversee a small team and act as a liaison between Congress, the White House, and various agencies overseeing cryptocurrencies, like the SEC or Commodity Futures Trading Commission. In this regard, Trump was supposed to meet with former Coinbase Global and Binance.US director Brian Brooks, a potential candidate for SEC chairman, and Coinbase Global CEO Brian Armstrong. The mentioned companies are cryptocurrency exchanges headquartered in California.

– The post-election rally in the cryptocurrency market results from deferred demand, previously suppressed by uncertainty and a lack of clear regulatory vision in the United States. This factor, combined with positive macroeconomic forecasts for 2025, creates favourable conditions for cryptocurrencies – believes Thomas Perfumo.

According to him, the rapid pace of this bull market should not be surprising.

– We are witnessing a sharp increase in demand for a commodity whose supply is fixed and does not respond to price signals. With traditional commodities such as oil or precious metals, mining and refining companies would increase production to meet demand. With bitcoin, it's quite different – he argues.

More than 94% of all bitcoins have already been mined using the computing power of computers. The supply is around 0.8% per year and will decrease each subsequent year. With such high demand for bitcoin as at present, according to Thomas Perfumo, there is only one logical consequence: an increase in price.

Not only Kraken is full of optimism. The competitor Binance is as well.

We are observing enormous interest in bitcoin and other cryptocurrencies. It is driven by many macroeconomic factors: interest rate cuts by the Fed, the prospect of a pro-cryptocurrency administration in the USA under Trump's leadership, the recent approval of bitcoin ETFs, and growing corporate interest in acquiring digital assets. Although we cannot predict market behaviour, which always operates in bull and bear cycles, we remain long-term optimistic – says money.pl's Natalia Kosińska, marketing manager at Binance.

She emphasises that after each market correction, bitcoin remained above the previous cycle's minimum. This is also noted by Eryk Szmyd, an analyst at the investment platform XTB.

– If previous cycles could serve as a guide, the bull market should end roughly in the third quarter of next year. However, there is no certainty that everything will go according to plan, as the activity of ETFs in the United States represents a new demand component for bitcoin – cautions the interlocutor of money.pl.

Basing the analysis on previous years' cycles, an XTB analyst forecasts that bitcoin’s price during this bull market could rise to about $160,000, while Ethereum—the second-largest cryptocurrency by market capitalisation—could reach $10,000. Positioned as Ethereum's main competitor, Solana, according to Szmyd, has a chance to exceed $1,000. Ripple, on the other hand, could rise to about five dollars under favourable conditions.

However, Peter Schiff, an American economist, bitcoin critic, and gold advocate, remains sceptical. In his podcast, Schiff commented on the rapid increase in Bitcoin’s rate, claiming that MicroStrategy's technology company is responsible for inflating the bubble.

It's a publicly traded company that purchases bitcoins with money from debt securities. On Thursday, it announced the completion of a $3 billion issuance to increase its cryptocurrency reserve. According to Schiff, this capital injection boosted the digital currency's price above $99,000 last week. He believes that such a gambling approach could end in disaster—at least, that's Schiff’s opinion.

There are at least several thousand types of cryptocurrencies in the market, which are worth about $3.4 trillion. Bitcoin's share in this amount was 58%, and Ethereum's was 12%. Thomas Perfumo estimates that around 10% of the world’s population currently has access to cryptocurrencies, while two-thirds of humanity already has access to the internet. If the industry’s development pace continues, Kraken’s representative expects a billion new cryptocurrency users within the next two to three years.

The Financial Supervision Authority (KNF), similar to the SEC during Joe Biden's administration, takes a very cautious approach to cryptocurrencies. The Polish financial market regulator’s stance remains valid: Virtual currencies pose mainly high exchange rate risk, which could lead investors to sudden losses and unpredictable outcomes. Moreover, KNF warns market participants about hackers targeting cryptocurrency exchanges and wallets and scammers impersonating investment platforms aimed at emptying the victim's account.