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. It is currently trading above $101,000.
Bitcoin bulls remain confident that the cryptocurrency will continue to trade higher than $100,000 despite a history of volatility.
Bitcoin investors cheered Wednesday after Trump picked pro-crypto Paul Atkins to head the SEC. The agency's enforcement approach toward the crypto industry under its current leader, Gary Gensler, had market watchers closely monitoring this appointment. Gensler announced he would step down on Jan. 20.
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 has been on a tear ever since Trump won the 2024 U.S. presidential election, as his victory is expected to be a positive development for the crypto industry as a whole. After all, bitcoin was still trading below $70,000 on Election Day.
Putin encouraged bitcoin investors even more. 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 can prohibit 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.
Analysts at Bernstein 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 note Thursday.
One factor that keeps bitcoin believers undeterred is that there can only ever be 21 million bitcoin. With finite supply and increasing demand, basic economics dictates that the price has to go up over the long term, even if there are rough patches of 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. They also anticipate the price per bitcoin to rise to $500,000 by 2029 and $1 million by 2033.
Technical analysis suggests bitcoin could head higher to $129,930, although it offers support levels of $90,500 and $80,500 on the lower end in case profit-taking triggers a downtrend.
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 insists that bitcoin’s finite supply, its outperformance versus the stock markets, and its inherent volatile nature make it a better investment bet than other commodities such as gold.
Volatility is “a feature, not a bug,” of a market that trades 24x7, 365 days a year globally, Saylor told CNBC in an interview earlier this week.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.