(Reuters) -Bitcoin catapulted above $100,000 for the first time on Thursday, a milestone hailed even by sceptics as a coming-of-age for cryptocurrencies as investors bet on a friendly U.S. administration to cement cryptos’ place in financial markets.
The total value of the cryptocurrency market has almost doubled over the year so far to hit a record just shy of $3.8 trillion, according to data provider CoinGecko. By comparison, Apple (NASDAQ:) alone is worth about $3.7 trillion.
‘s march from the libertarian fringe to Wall Street has minted millionaires, a new asset class and popularised the concept of “decentralised finance” in a volatile and often controversial period since its creation 16 years ago.
Bitcoin has more than doubled in value this year and is up more than 50% in the four weeks since Donald Trump’s sweeping election victory, which also saw a slew of pro-crypto lawmakers being elected to Congress.
Once it broke $100,000 in Thursday’s Asian morning, it was soon above $103,000 and was last fetching $103,335.
“We’re witnessing a paradigm shift,” said Mike Novogratz, founder and CEO of U.S. crypto firm Galaxy Digital (TSX:).
“Bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream – this momentum is fuelled by institutional adoption, advancements in tokenisation and payments, and a clearer regulatory path.”
Trump embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet” and to accumulate a national stockpile of bitcoin.
“We were trading basically sideways for about seven months, then immediately after Nov. 5, U.S. investors resumed buying hand-over-fist,” said Joe McCann, CEO and founder of Asymmetric, a Miami digital assets hedge fund.
On Wednesday, Trump said he would nominate Paul Atkins to run the Securities and Exchange Commission.
Atkins, a former SEC commissioner, has been involved in crypto policy as co-chair of the Token Alliance, which works to “develop best practices for digital asset issuances and trading platforms,” and the Chamber of Digital Commerce.
“Atkins will offer a new perspective, anchored by a deep understanding of the digital asset ecosystem,” said Blockchain Association CEO Kristin Smith.
“We look forward to working with him … and ushering in – together – a new wave of American crypto innovation.”
A slew of crypto companies including , Kraken and Circle are also jostling for a seat on Trump’s promised crypto advisory council.
PART OF THE LANDSCAPE
Bitcoin has proven a survivor through precipitous downturns.
Its move into six-figure territory is a remarkable comeback from a dip below $16,000 in 2022 when the industry was reeling from the collapse of the FTX exchange. Founder Sam Bankman-Fried was subsequently jailed.
Analysts say the growing embrace of bitcoin by big investors this year has been a driving force behind the record-breaking rally.
U.S.-listed bitcoin exchange-traded funds were approved in January and have been a conduit for large-scale buying, with more than $4 billion streaming into these funds since the election.
“Roughly 3% of the total supply of bitcoins that will ever exist have been purchased in 2024 by institutional money,” said Geoff Kendrick, global head of digital assets research at Standard Chartered (OTC:).
“Digital assets, as an asset class, is becoming normalised,” he said. “If you fast forward a number of years on trading floors you’ll have a sales and trading desk…which will sit alongside FX and rates and commodities.”
It is already becoming increasingly financialised, with the launch of bitcoin futures in 2017 and a strong debut for options on BlackRock (NYSE:)’s ETF in November.
Crypto-related stocks have soared along with the bitcoin price, with shares in bitcoin miner MARA Holdings and exchange operator Coinbase (NASDAQ:) each up around 65% in November.
Trump himself unveiled a new crypto business, World Liberty Financial, in September, although details have been scarce and billionaire Elon Musk, a major Trump ally, is also a proponent of cryptocurrencies.
‘WHO CAN PROHIBIT IT’
The cryptocurrency industry has been criticised for its massive energy usage, while crypto crime remains a concern, and the underlying technology is yet to deliver a major revolution in the way money moves around the globe.
Still, as Russian President Vladimir Putin pointed out at an investment conference on Wednesday: “Who can prohibit it? No one.” And its longevity is perhaps testament to a degree of resilience.
“As time goes by it’s proving itself as part of the financial landscape,” said Shane Oliver, chief economist and head of investment strategy at AMP (OTC:) in Sydney.
“I find it very hard to value it … it’s anyone’s guess. But it does have a momentum aspect to it and at the moment the momentum is up.”
Read the full article here
