Bitcoin (BTC) has surged to new heights, trading just shy of $90,000 for the first time in history as the cryptocurrency market continues to rally.
The flagship digital asset reached a high of $89,623 on Monday, reflecting a remarkable 12% increase, with its price currently hovering around $89,100. This marks a dramatic climb from just a day earlier when Bitcoin breached $80,000, signaling a period of intense price discovery and optimism in the market.
The latest surge comes after Bitcoin set an all-time high earlier this month, with analysts now predicting it could reach the six-figure mark before the end of 2024. According to Mike Colonnese, an analyst at H.C. Wainwright, Bitcoin is now “in price discovery mode” following its breakthrough past previous all-time highs. Colonnese attributes much of this momentum to the election of President-elect Donald Trump, whose promises of a more crypto-friendly regulatory environment have sparked renewed optimism among investors.
“Strong positive sentiment is likely to persist through the balance of 2024,” Colonnese noted.
Some speculated, that Bitcoin could hit $100,000 by the end of the year.
Trump’s victory has been hailed by many in the crypto community, who see his plans to make the US more supportive of cryptocurrency as a major factor in the current bull run. During his presidential campaign, Trump reversed his earlier skepticism toward digital assets, vowing to make the US “the crypto capital of the planet” and even proposing a US Bitcoin stockpile. The anticipation of a crypto-friendly administration has spurred a wave of speculative buying across various digital currencies.
“It’s hard to see what would force sellers to come into this market and halt the momentum before we get to that level… We’re in a new crypto market cycle, and the bias is still on the upside,” said Matt Hougan, chief investment officer of Bitwise Asset Management.
Bitcoin’s climb is part of a broader rally in the cryptocurrency market, with other assets also seeing significant gains. Ether (ETH) rose 5.8%, while XRP, the token associated with payment company Ripple, gained nearly 4%. Dogecoin, likely benefiting from its connection to Elon Musk, surged by an impressive 38%.
In the stock market, Bitcoin-related companies have also benefited from the surge. Coinbase, a leading cryptocurrency exchange, saw a 19% rise in its stock price, reaching its highest level since 2021. Meanwhile, MicroStrategy, a software firm that holds a large stash of Bitcoin, reported purchasing an additional 27,200 Bitcoin for approximately $2 billion in early November.
As Bitcoin continues its ascent, traders and analysts remain bullish, with many forecasting that the rally is far from over. Some have noted that Bitcoin is entering an “air gap” between its previous all-time highs of around $72,000 and the $100,000 mark, making it difficult to predict where resistance might come into play.
“It’s hard to see what would stop this rally before we reach $100,000,” Hougan said.
He added that the combination of regulatory shifts and strong demand for Bitcoin and other cryptocurrencies has set the stage for further price appreciation.
However, despite the optimism, experts warn that the volatile nature of cryptocurrencies makes them risky investments. Bitcoin’s price has seen drastic fluctuations in the past, with notable crashes following periods of intense growth. The collapse of crypto exchange FTX in 2022 and the market’s subsequent downturn serves as a reminder of the risks inherent in the sector.
While many investors are riding high on the current surge, Susannah Streeter, head of money and markets at Hargreaves Lansdown, advises caution.
“Investors should only dabble in crypto with money that they can afford to lose,” she cautioned.
As the US approaches the inauguration of President-elect Trump, the potential for a more favorable regulatory environment has investors eagerly watching Bitcoin’s next moves. While some analysts expect a period of consolidation after the recent surge, the broader consensus remains optimistic about the cryptocurrency’s future growth.
CNBC, the Associated Press, and Bloomberg contributed to this report.
