Bitcoin soared above $100,000 for the first time in history on Thursday, marking a milestone that underscores the cryptocurrency's maturation from a fringe asset to a financial heavyweight. This surge, spurred by pro-crypto shifts in U.S. political leadership under President-elect Donald Trump, represents a pivotal moment for digital assets, cementing their place in mainstream financial markets.
The digital currency reached an all-time high of $104,000 early Thursday, following Trump's nomination of crypto advocate Paul Atkins as the next chair of the Securities and Exchange Commission (SEC). Atkins, a former SEC commissioner, is well-known for his work on digital asset policy and his leadership role in the Token Alliance. "Atkins will offer a new perspective, anchored by a deep understanding of the digital asset ecosystem," said Kristin Smith, CEO of the Blockchain Association.
Bitcoin's climb to six figures caps a year of explosive growth, with its value more than doubling since January. Institutional adoption, reduced supply from Bitcoin's fourth halving, and over $31 billion in inflows into U.S. Bitcoin exchange-traded funds (ETFs) have all played a role in this historic rally. "We're witnessing a paradigm shift," said Mike Novogratz, CEO of Galaxy Digital. "Bitcoin and the digital asset ecosystem are entering the financial mainstream."
The cryptocurrency's rapid ascent follows Trump's promise to make the U.S. the "crypto capital of the planet." His administration is expected to feature a robust pro-crypto agenda, with nominations of key financial leaders such as hedge fund manager Scott Bessent and Cantor Fitzgerald CEO Howard Lutnick to top Treasury and Commerce positions. These appointments signal a sharp departure from the regulatory hurdles imposed during the Biden administration.
The broader cryptocurrency market has also surged, with its total capitalization nearing $3.8 trillion. Notably, Bitcoin's market cap crossed the $2 trillion mark for the first time, dwarfing the valuation of some of the world's largest companies. "Digital assets, as an asset class, are becoming normalized," said Geoff Kendrick, global head of digital assets research at Standard Chartered.
The momentum has fueled a rally in crypto-related stocks. Shares in Coinbase and MARA Holdings have jumped approximately 65% in November, while MicroStrategy, a corporate Bitcoin giant, has seen its stock skyrocket 540% this year. The company holds over 402,000 Bitcoins, valued at more than $40 billion.
Despite its record-breaking performance, Bitcoin has faced criticism for its energy consumption and potential misuse in illicit activities. Critics highlight its massive energy footprint, comparable to that of entire nations like South Africa or Poland, and recent reports of its use in money laundering schemes. Nevertheless, Bitcoin's advocates argue that these challenges do not outweigh its potential to revolutionize finance. "As time goes by, it's proving itself as part of the financial landscape," said Shane Oliver, chief economist at AMP.
The crypto boom also underscores its resilience. Bitcoin has rebounded from a 2022 low of $16,000 following the collapse of FTX and the subsequent imprisonment of its founder, Sam Bankman-Fried. Analysts credit the rebound to growing institutional confidence and the emergence of new financial products like Bitcoin futures and ETFs.
While Bitcoin's current rally has drawn comparisons to its meteoric rise in 2017, when its value surged 1,900%, the market has matured significantly since then. Institutional players now account for a larger share of the market, purchasing approximately 3% of Bitcoin's total supply in 2024 alone.
