Bitcoin continued its meteoric rise on Thursday, reaching a new record high of over $98,000 and closing in on the psychologically significant $100,000 mark. The cryptocurrency has soared more than 40% in just two weeks, fueled by post-election optimism and the promise of a crypto-friendly administration under President-elect Donald Trump.
As of Thursday morning, Bitcoin traded at $97,541.61, according to Coin Metrics, after briefly touching $98,367. This unprecedented surge has sent ripples across the broader cryptocurrency market, with major players like Coinbase and MicroStrategy experiencing notable premarket gains of 2% and 13%, respectively. Mining stocks, including Mara Holdings, also rallied, climbing 9%.
The bullish sentiment is largely driven by Trump's vocal support for the crypto industry. During his campaign, Trump pledged to make the United States "the crypto capital of the planet" and hinted at establishing a national strategic bitcoin reserve. His proposed dismissal of SEC Chair Gary Gensler, a proponent of stricter crypto regulations, has further fueled investor confidence.
"Trump's promises to bolster crypto regulation and foster innovation are giving the market a massive tailwind," said Rob Ginsberg, an analyst at Wolfe Research. "The next major test will be the $100,000 milestone, which could come sooner than anticipated."
Bitcoin's rapid ascent was also catalyzed by a surge in futures market activity. A spike in funding rates and open interest during Asian trading hours pushed the cryptocurrency higher, while over $88 million in short liquidations within 24 hours further amplified the upward momentum, according to data from CoinGlass.
Cryptocurrency analysts and investors have pointed to several additional factors underpinning Bitcoin's rally. The approval of spot Bitcoin ETFs earlier this year provided a new gateway for institutional investors, drawing billions of dollars into the market. Citi analysts noted that spot ETF inflows have been the dominant driver of Bitcoin's performance and are expected to continue shaping its trajectory.
"This is an extraordinary moment for Bitcoin," said David Glass of Citi. "The approval of spot ETFs has added credibility and accessibility, attracting investors who were previously hesitant about the market."
However, not everyone is sold on the current rally. Critics have warned of Bitcoin's infamous volatility, with some urging caution amid the euphoria. Bitcoin's history has been marked by dramatic price swings, including a crash from $69,000 in 2021 to below $17,000 following the collapse of FTX in late 2022.
Despite these warnings, many investors remain bullish, citing a supply-side "shock" following Bitcoin's fourth halving event earlier this year. This pre-programmed reduction in mining rewards has tightened supply, further driving up prices as demand surges.
The environmental impact of Bitcoin mining has also resurfaced as a topic of concern. A study published by the United Nations University revealed that Bitcoin mining emissions in 2020-2021 were equivalent to burning 84 billion pounds of coal. While the industry has made strides toward cleaner energy sources, critics argue that the sector's carbon footprint remains significant.
