Bitcoin Just Hit $100,000. Where Will It Go in 2025?
12/06/2024 11:26
What does Bitcoin's $100,000 milestone mean for investors? Here's what you need to know about the cryptocurrency's direction in 2025 and beyond.
The oldest and largest cryptocurrency took a history-making step on Wednesday evening. After getting close and moving back a few times, Bitcoin (CRYPTO: BTC) finally crossed the $100,000 price point for the first time.
How important is this milestone for Bitcoin and its investors, and where will the leading cryptocurrency go from here?
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
Let's think about that for a minute.
Bitcoin had been hanging around just below $100,000 for a while. The coin rose above $99,340 on Nov. 22, retreated below $91,300 over the next week, and then bounced between $45,000 and $98,000 for a few days.
Wednesday's surge started around noon ET. Rising from a 24-hour low of roughly $94,800, the coin reached a $98,000 plateau four hours later. Near 9:30 p.m. ET, one of my market-tracking apps buzzed in my pocket, saying that Bitcoin was nearing the $99,000 level. Less than 10 minutes after that, I watched a live Bitcoin price tracker skip from a bunch of 9s to just above the legendary $100,000 mark.
The surge didn't stop there, and Bitcoin rose above $102,000 while I wrote the paragraphs above. Time flies when you're having fun in the crypto space.
As for the reasons behind this sudden spike, Bitcoin investors lionized the incoming Trump administration's nominee to lead the U.S. Securities and Exchange Commission (SEC). Current SEC Chairman Gary Gensler hasn't provided much support to the crypto industry, but he recently preannounced his January resignation. On Wednesday evening, President-elect Trump said he wants the crypto-friendly Paul Atkins to take Gensler's seat. Bitcoin didn't immediately soar when the Atkins pick was published, giving investors a few hours to mull over the implications of the Atkins pick.
The SEC chair doesn't hold absolute power over how Bitcoin and other cryptocurrencies will be regulated. But this officer can steer the SEC in a certain direction, and Atkins certainly looks like a more crypto-friendly regulator than Gensler.
Atkins has said that the SEC should "update its regulations concerning custody of digital assets," using stronger tools than mere guidelines in staff accounting bulletins. He is also a well-known proponent of free market forces, often suggesting that the government should play a very limited role in how people and companies manage their assets -- including cryptocurrencies.
So the bullish market reaction to this nomination makes a lot of sense. It remains to be seen whether Atkins is confirmed to this post and how his SEC leadership works out in the real world, but his presence seems to have some upside for crypto investors.
Zooming out from Wednesday's big benchmark, Bitcoin has several potentially price-boosting catalysts in play right now:
-
The fourth halving of Bitcoin mining rewards took place last April, fundamentally changing the economics of Bitcoin production. History doesn't repeat itself, but the first three halvings led to substantial price increases over the next year to year and a half. This effect isn't random, since it springs from a changing calculus of fixed production costs resulting in fewer new Bitcoins. There's no reason why the fourth halving cycle should be materially different from its predecessors.
-
The SEC approved 11 spot Bitcoin exchange-traded funds (ETFs) in January. The move was made after years of ETF applications and lobbying -- a process that probably would have moved faster under a more crypto-friendly SEC board. These funds give investors a new way to approach cryptocurrencies by means of a stock-like instrument in a standard stock brokerage account. So far, these funds manage more than $104 billion of actual Bitcoin holdings. New funds have been flowing into the leading iShares Bitcoin ETF over the last month, and the Atkins nomination could spark another wave of investor dollars moving into the crypto space this way. From retirement accounts to massive institutional investors, whole new investor classes suddenly have the option to make pretty direct Bitcoin investments with spot Bitcoin ETFs.
-
There's more and more crypto chatter in the media. The rising scrutiny and attention should only grow more intense as the other price-aiding catalysts play out in 2025 and beyond. Crypto is going mainstream, and digital coins might soon reach a critical mass where it makes sense to use them for everyday tasks. I haven't paid for milk and eggs in Bitcoin yet, and maybe I never will -- this currency was designed for long-term value storage rather than quick in-store transactions, after all. But other cryptocurrencies and decentralized finance apps could become the next bog-standard payment system, with positive implications for the entire crypto sector. Active use is how cryptocurrencies -- or any other asset -- really builds value in the long run.
Long story short, Bitcoin has plenty of fuel for a potential bull run in 2025. The incoming SEC leader may add weight to the upward momentum but he isn't the whole story. Likewise, this week's passing of the $100,000 waypost is a unique moment in Bitcoin's history, but it's also just another step in a long journey.
For these reasons, I think it's a good idea to have some exposure to Bitcoin and other leading cryptocurrencies right now. You can start a crypto brokerage account and grab the real thing, or take the alternate route through ETF shares.
Either way, crypto assets look ready to play a supporting part in any properly diversified portfolio. If you don't have any yet, this could be be a good time to get started.
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
-
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $363,671!*
-
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $45,954!*
-
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $486,533!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of December 2, 2024
Anders Bylund has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
Bitcoin Just Hit $100,000. Where Will It Go in 2025? was originally published by The Motley Fool