The price of bitcoin hit $100,000 for the first time on Wednesday, driven by surging demand and the election of crypto-friendly candidates, including President-elect Donald Trump. Since November 5, the price of bitcoin has surged more than 45% and has more than doubled year-to-date. The rise of bitcoin, which was introduced through a white paper by Satoshi Nakamoto 15 years ago, has spawned a technological landscape of peer-to-peer transactions, digital tokens, NFTs, and trading platforms. However, cryptocurrencies have been controversial due to their association with cybercrimes and scams. Currently, federal regulators remain skeptical of many cryptocurrency efforts.
Bitcoin advocates hope for a pro-crypto stance in Washington post-election, to ease regulations on digital tokens, involve traditional financial institutions in bitcoin investing, and boost profitability of bitcoin mining through increased energy production. Trump, who was once skeptical about crypto, has shown interest in establishing a U.S. bitcoin “strategic reserve” akin to reserves for gold and oil. Price movements of bitcoin remain volatile, but the overall trend has been upward. A significant portion of recent demand for bitcoin has been driven by ETFs tracking the cryptocurrency’s price, with BlackRock’s iShares Bitcoin Trust ETF being the largest.
Jay Jacobs, BlackRock’s U.S. head of thematic and active ETFs, notes growing interest in bitcoin as a hedge against geopolitical risks and inflation-induced currency devaluations. He sees ETFs as a convenient way for investors to participate in bitcoin’s price movements, predicting a tipping point of mainstream interest in the cryptocurrency. Overall, the future of bitcoin remains uncertain but promising as it continues to attract new investors and financial institutions.
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