Alice Morgan, Alice Morgan’s composite photo for Investopedia. Getty Images
The Key Takeaways
- Bitcoin rose to $100,000 on Wednesday, but fell back Thursday as profit-taking led it down.
- The surge past $100K followed comments regarding the crypto asset from Russian President Vladimir Putin and Federal Reserve Chairman Jerome Powell, in addition to Donald Trump's nomination of Paul Atkins as the next SEC chair.
- A growing demand for bitcoin has led to analysts setting price targets above $100,000.
- Although bitcoin’s price volatility may be present, it is likely to be less severe than in the past.
Bitcoin (BTCUSD) soared past $100,000 for the first time Wednesday night, and analysts think it could stay there.
Encouraging words from Russian President Vladimir Putin, Federal Reserve Chair Jerome Powell and President elect-Donald Trump's pick for the U.S. Securities and Exchange Commission (SEC) Chair boosted bitcoin to a high of more than $103,000. Though, bitcoin, which is the most valuable cryptocurrency by market capital, traded down Thursday afternoon and was nearing $98,000, in what appeared to be profit-taking.
But bitcoin bulls still believe that Bitcoin will continue to be traded higher than $100,000, even though it has a volatile history.
Trump, Putin, and Powell Comments Increase Bitcoin Prices
Bitcoin traders cheered on Wednesday, after Trump chose pro-crypto Paul Atkins for the SEC. Market watchers were closely watching this appointment because of the agency’s approach to enforcement towards the crypto industry, under Gary Gensler. Gensler announced his resignation on January 20, 2019.
Trump took to Truth Social to congratulate bitcoin holders and seemingly take credit for the cryptocurrency's latest price milestone. "CONGRATULATIONS BITCOINERS!!!," Trump posted. "$100,000!!! YOU’RE WELCOME!!! Together, we will Make America Great Again!"
Bitcoin is on an upswing since Trump’s victory in the U.S. Presidential election of 2024, which was expected to have a positive impact on the entire crypto industry. Bitcoin was trading at less than $70,000 even on Election Day.
Putin has encouraged even more bitcoin investors. At an investment conference Wednesday, Putin said the U.S. was undermining the dollar's role as a global reserve currency by using it for political purposes, forcing some countries to look for alternatives, Reuters reported.
"For example, bitcoin. Who is able to ban it? No one," Putin said
While bitcoin supporters have long touted the cryptocurrency as 'digital gold,' Fed Chair Powell said the same in a rare comment from a policymaker on the subject.
"It's not a competitor for the dollar. It's really a competitor for gold," Powell said Wednesday.
Bernstein’s analysts also agreed.
“We expect Bitcoin to emerge as the new-age premier ‘store of value’ asset eventually replacing Gold over the next decade,” They wrote in a letter on Thursday.
Limited Bitcoin Supply Could Be Good for Future Gains
Bitcoin believers are not discouraged by the fact that there will only be 21 million bitcoin in existence. The finite amount of bitcoin and the increasing demand dictate that prices will continue to rise in the long run, despite volatility.
"You have explosive demand for a commodity whose supply is fixed and does not respond to price signals," said Kraken's Head of Strategy Thomas Perfumo. "In traditional commodities like oil or precious metals, we’d see companies that refine and mine these resources increase production to satisfy demand."
After it breached the psychological $100,000 barrier, many of the bitcoin price predictions from earlier in the year suddenly don't seem insurmountable.
"We remain convinced $100,000 is not the final milestone. We expect Bitcoin to hit a cycle-high of $200,000 in late 2025," wrote the Bernstein analysts. Also, they expect that the price of bitcoin will rise to $5000 by 2029. And $1 million by 2030.
According to technical analysis, bitcoin is likely to reach a high of $129,930. It also has support levels at $90,500, and $80.500, respectively, on the low end, in case a profit-taking downtrend occurs.
It's important to remember that pullbacks will still occur in any bull market; however, according to Bitwise Chief Investment Officer Matt Hougan, bitcoin price drops may be less severe going forward.
MicroStrategy Chairman Michael Saylor believes that the finite nature of bitcoin, its performance compared to stock markets and its volatility make it an excellent investment.
Volatility can be defined as: “a feature, not a bug,” Saylor said in an interview this week that the global market trades 24/7, 365-days per year.
The story was updated to reflect recent Bitcoin price changes.
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