Will Bitcoin Cross $100,000 Mark? Rally Decoded

On Thursday, Bitcoin topped $98,000 for the first time extending a streak of almost daily all-time highs since the US presidential election.

Cryptocurrency has rocketed more than 40% within a span of just two weeks.

Bitcoin is about to reach the $100,000 benchmark and investors are not phased by gravity or the volatility of cryptocurrencies.

Since the incoming Trump administration is crypto-friendly cryptocurrencies and related investments like crypto exchange traded funds have rallied. So while some experts are bullish, other experts are warning of investment risks

But What Is Cryptocurrency?

Cryptocurrency is digital money. This currency is designed to work through an online network without a central authority which means that is not supervised or regulated by the government or any banking institution and all transactions get recorded through blockchain.

Bitcoin is the largest and oldest cryptocurrency, although other assets like Ethereum, Tether and Dogecoin have also become popular over the years. It is often seen as a digital alternative to money but it is also volatile.

Why Is Cryptocurrency All The Rage?

Cryptocurrency has recently been in the limelight due to Trump's close association with it and his recent investments in Crypto .

According to an AP report, "Trump has evolved from a crypto sceptic to a crypto champion and has pledged to make the US the crypto capital of the planet and create a strategic reserve of bitcoin."

Trump's election campaign accepted donations in cryptocurrency and his victory.

Bitcoin assets had posted notable gains during elections mostly due to the early success of a new way to invest in the asset called spot bitcoin ETF which was approved by US regulators.

"Inflows into spot ETFs, have been the dominant driver of Bitcoin returns from some time, and we expect this relationship to continue in the near-term," Citi analysts David Glass and Alex Saunders wrote in a research note two weeks ago.

The Risks

Since the long-term crypto price behaviour relies on larger market behaviours, it is just as easy to lose money on crypto as it is to make it.

Bitcoin stood at $5,000 at the start of the COVID-19 pandemic. Its price climbed to nearly USD 69,000 by November 2021, which was a time that was marked by a high demand for technology assets, according to the AP report.

"Bitcoin later crashed during an aggressive series of Federal Reserve rate hikes aimed at curbing inflation," the report added.

Additionally, due to the collapse of FTX in late 2022, investor confidence in crypto was significantly undermined and bitcoin fell below $17,000.

(With AP inputs)

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