Bitcoin’s value continues to soar, nearing an unprecedented $100,000 this week after doubling in value throughout 2024. This remarkable surge marks a milestone for the digital currency, which has been at the forefront of the cryptocurrency movement since its launch in 2009.
The recent growth of Bitcoin—up about 130% this year—is tied to what market analysts call “Trump trades,” referring to economic moves influenced by former President Donald Trump’s re-election on 5 November. Trump’s known interest in cryptocurrencies has fueled optimism among investors, who believe his leadership will usher in a more crypto-friendly regulatory environment.
Trump’s engagement with the crypto world includes ventures such as crypto-based trading cards and the September launch of his family’s own cryptocurrency firm, World Liberty Financial. Additionally, his administration has appointed Tesla CEO Elon Musk and entrepreneur Vivek Ramaswamy to co-lead the newly formed Department of Government Efficiency (DOGE)—a nod to Dogecoin, a popular meme-inspired cryptocurrency.
Despite the enthusiasm, financial experts continue to warn of Bitcoin’s volatility and risks. “Remember that Bitcoin and crypto are highly volatile and may be more susceptible to market manipulation than securities,” cautioned Fidelity Investments in a guide for investors. “Crypto holders do not benefit from the same regulatory protections applicable to registered securities, and the future regulatory environment for crypto is currently uncertain.”
Understanding Bitcoin
Bitcoin operates on a decentralized blockchain network, a digital ledger designed to prevent fraud. Transactions are validated by crypto miners, who earn Bitcoin in return for their computational work. Bitcoin is capped at 21 million tokens, with about 19 million already in circulation. As the cap approaches, demand typically increases, further driving up its value.
Bitcoin’s increasing accessibility has also played a role in its growth. The U.S. Securities and Exchange Commission (SEC) approved Bitcoin-based exchange-traded funds (ETFs) earlier this year, allowing investors to trade Bitcoin in a manner similar to stocks. This move has made Bitcoin more appealing to traditional investors.
Broader Adoption and Concerns
Bitcoin can be used to purchase goods and services, with companies like Microsoft, Tesla, and AT&T accepting cryptocurrency payments. Additionally, Bitcoin debit cards allow users to spend their holdings as easily as traditional currency.
However, Bitcoin’s volatile history raises concerns. The collapse of FTX in 2022, which resulted in an $8 billion loss for customers, remains a cautionary tale. Prominent skeptics like Warren Buffett maintain their reservations about cryptocurrencies, while others predict even greater heights. Anthony Scaramucci and Cathie Wood project Bitcoin could reach $170,000 by mid-2025 and $1.48 million by 2030, respectively.
As Bitcoin continues to dominate headlines, its supporters argue that wider adoption will lead to greater stability. For now, the cryptocurrency’s ascent underscores both its potential and the challenges it faces in becoming a mainstream asset.
