With $100,000 now within reach, professional traders say that a crypto-friendly presidential administration and the inflow of institutional money could mean the rally is just getting started.

“The market is realizing just how big of a regime shift is underway,” Quinn Thompson, the founder of the crypto hedge fund Lekker Capital, told Fortune. “The U.S. government and regulatory bodies, the strongest entities in the world, are now moving away from an anti-crypto stance to one of embrace.”

Political sea change

The crypto industry has faced a difficult few years, with the collapse of major companies from FTX to Terraform Labs leading to a prolonged crypto winter—and a flurry of lawsuits and criminal charges from the U.S. government. While the launch of Bitcoin ETFs in January spurred a year-long rally, the uncertain regulatory environment leading up to the presidential election kept institutional and retail money out of the markets.

Trump promised a different future for crypto during his campaign. While the former president was critical of digital assets during his first term, he embraced the blockchain industry the second time around, courting donors and teasing projects like a strategic Bitcoin reserve, where the government would hold a cache of the cryptocurrency. He has also pledged to stock regulatory agencies with pro-crypto voices, which would be a major change from figures like SEC chair Gary Gensler, who has sought to reign in the industry.

Even before the AP officially called the election for Trump early Wednesday morning, crypto markets rose with the assumption that he would win, including breaking $70,000 the week before. Since Wednesday, Bitcoin has marched upwards, including breaking $80,000 on Sunday and reaching a high near $90,000 on Tuesday.

"What we've witnessed in the last week or so has been, from a political perspective, a re-ushering of people needing to pay attention to crypto," said Zaheer Ebtikar, the founder of the crypto hedge fund Split Capital. "This has become not only a huge winner of the year but also an almost legitimized industry via the government."

That political embrace could just be getting started, especially as Trump begins to build the team of cabinet officials and advisors around him. The head of his transition, Cantor Fitzgerald CEO Howard Lutnick, is a crypto booster and serves as the main custodian for the leading stablecoin, Tether. Sources familiar with the transition have also cited potential crypto-friendly picks at the SEC, including Robinhood chief legal officer Dan Gallager and former CFTC commissioner—and self-titled "CryptoDad"—Christopher Giancarlo.

Smart money

Speculation has mounted on Crypto Twitter about whether the arrival of institutional—or even sovereign—money has spurred the rally. Thompson said that institutional interest, including from university endowments, pensions, and hedge funds, is a major factor, pointing to the "staggering" size of ETF inflows. Ebtikar agreed, citing that bidding on prices has been mechanical, rather than random.

The question of whether governments have also been buying Bitcoin is more difficult to answer, although the shift in the U.S. approach could create a stampede. "The potential for a strategic Bitcoin reserve may motivate other nation-states around the world to evaluate the idea as well," said Thompson.

The flood of once-skittish institutional money into crypto could also create a feedback loop, as capital allocators now have to face questions from their investing committees on how they are approaching the newly legitimized asset class. "Not only are prices going up, but they're going up for a pretty monumental reason," said Ebtikar.

According to Joshua Lim, the cofounder of the crypto trading platform Arbelos, Bitcoin is now in price discovery mode after breaching its all-time high, meaning that it has broken out of its normal price range and led to a re-evaluation among investors. And while institutional money may be driving the current rally, retail is likely not far behind.

Lim told Fortune that extreme behaviors are beginning to emerge, including highly leveraged retail trading resulting in liquidation cascades on both the upside and downside, as well as flows into risky crypto sectors such as AI memecoins. And one metric for evaluating demand—perpetual swap funding rates—are as high as 40-60%, compared to an average of 5-10%, reflecting much higher rates of participation.

When Bitcoin finally reaches the mythical $100,000 barrier is anyone's guess, but Thompson is optimistic it will happen soon. "I feel good that we hit it by year-end," he told Fortune. "Very possible by end of month, but we'll see."