Important Takeaways
• With hope around the incoming pro-crypto Trump administration, Bitcoin saw its first-ever trade above $100,000.The most recent spike follows Trump’s appointment of Paul Atkins to lead the U.S. Securities and Exchange Commission, a move that the cryptocurrency community welcomed.
• Following a robust post-election surge, the price of bitcoin fell recently as some investors cashed out.
• Due to high leverage, some analysts caution that the price of bitcoin may correct.
In late trading on Wednesday, Bitcoin (BTCUSD) crossed the $100,000 mark for the first time.
Trading View data shows that the biggest cryptocurrency by market capitalization reached a new high of $101,419 dollars. Following President-elect Donald Trump’s nomination of pro-crypto Paul Atkins to head the U.S. Securities and Exchange Commission (SEC), prices recently surged.
Thanks to a post-election surge, Bitcoin nearly reached $100,000 in November. However, profit-taking caused it to drop as low as $91,000.
Since Trump’s election victory, investors have been flooding the market with bitcoin, cryptocurrency-related equities, and exchange-traded funds, mostly due to the expectation of more clarity surrounding cryptocurrency regulation and a more crypto-friendly administration.
Bitcoin Prices Are Still Being Driven by Investor Optimism
The announcement that the Trump administration would establish a cryptocurrency advisory council and perhaps even a bitcoin strategic reserve has delighted investors.
Following the announcement of Gary Gensler’s resignation as SEC head, Atkins’ nomination was viewed as further positive news for the cryptocurrency sector. Crypto proponents frequently lambasted Gensler for leading the SEC in an enforcement-heavy manner.
Recently, stocks tied to bitcoin have also seen increases. With more than 402,100 bitcoin, or more than $40 billion at today’s pricing, MicroStrategy (MSTR) has increased its holdings by more than 540% so far this year.
Despite a few setbacks, Bitcoin bulls remain unfazed.
With the adoption of spot bitcoin ETFs and a “halving” that slowed the rate at which new bitcoin are being issued, the year had already been quite active for the cryptocurrency. An mismatch between supply and demand has contributed to the rise in bitcoin prices.
However, other experts caution investors against using too much leverage and becoming overly enthusiastic. According to Galaxy Investment Partners CEO Mike Novogratz, he anticipates a return to $80,000 in bitcoin pricing.
He recently stated on CNBC.1 that “there will be a correction because the crypto community is roped to the gills.”
Bitcoin bulls were unfazed by the recent decline in the price of the cryptocurrency.
As bitcoin establishes itself as a popular investment over time, its price may be supported in the short term by a wave of corporate purchases, with opportunities to buy presented by abrupt price volatility.
“Every time Bitcoin began to decline, people began to fear that it might drop to zero, which is one reason why pullbacks have historically been so violent. That’s no longer an option, and an increasing number of investors are searching for a way in,” Bitwise Investment CIO Matt Hougan stated in a late-November statement.
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