A much-awaited moment has finally come. Bitcoin has finally crossed the $100k mark, proving almost all expert predictions right. Bitcoin’s legacy is unquestionable. It is the reason why the world has known the word ‘cryptocurrency’ properly. However, it is one of the reasons, but not the only reason, that helped Bitcoin achieve this feat. In this article, we’ll have a look at some key factors that helped it reach $100,000.
When Bitcoin crossed 45k earlier this year, we expected it to reach a skyrocketing price by the end of 2024, along with some factors that can play a huge role in the explosion. They are also responsible for this historic bull run. However, we already discussed them earlier this year, we’ll discuss some other key factors that also played a crucial role recently.
US Elections
Cryptocurrencies emerged as a notable topic in the recent US elections in 2024. The Republican Party introduced some pro-crypto candidates. Citizens of the US may have voted to expect crypto-friendly regulations from the Trump government, causing his victory.
As soon as Trump started getting a majority, Bitcoin’s price started skyrocketing unbelievably. Then Trump picked Paul Atkins, a renowned businessperson and a crypto supporter as an SEC chairman, which may have helped Bitcoin hit $100k for the first time.
Institutional Adoptions
After the US elections, Wall Street’s confidence started increasing in Bitcoin. Post-election, US-approved Bitcoin ETFs witnessed over $600 million in inflows. Microstrategy, a renowned company, increased its Bitcoin holdings. The company acquired over $2 billion worth of BTC in November alone.
Many reputed companies like Tesla and Microstrategy invested heavily in Bitcoin. Such corporate investments inspired many financial institutions to offer Bitcoin-related services and products. Such events presented Bitcoin as a valuable asset in the eyes of investors.
Bitcoin Halving
Recently, Bitcoin Halving took place in April 2024. This event helped create a scarcity premium by reducing the supply of new Bitcoin. With the decreased supply, the demand for Bitcoin started increasing, which may be one of the reasons for a surge in BTC’s price. Considering the history, halving events have been participating in significant price increases.
Increased Bitcoin Payments
Some renowned companies like Starbucks and Ferrari came forward and started accepting Bitcoin payments, which also inspired other businesses to do the same, potentially increasing Bitcoin’s use as a mode of payment. We saw some technological advancements like L2 solutions, which improved its scalability and transaction speeds, making it a suitable option for everyday payments.
Where average Bitcoin transactions per day ranged around 300k transactions per day till Apr 2023, it surged, and now it ranges around 500k transactions per day (source: YCHARTS), which sometimes goes over 800k. As more businesses and individuals started accepting Bitcoin payments, we can say that its price may have gone up with an increased demand. So, we can say that Bitcoin payments have also contributed significantly to this historic explosion.
Retail FOMO (Fear of Missing Out)
This is considered a psychological factor in Bitcoin’s historic achievement. Surging Bitcoin prices and growing institutional confidence attracted new retail investors to the ecosystem. Post-election, there are new 230,000 funded wallets witnessed by the Bitcoin wallet, indicating similar retail investors. The influx of new investors contributed significantly to Bitcoin crossing the $100K mark.
Conclusion
Bitcoin's journey to the $100,000 milestone is proof of its growing adoption, technological advancements, and increasing institutional interest. Some key factors, like the US elections, increased institutional adoption, Bitcoin halving, rising Bitcoin payments, and retail FOMO, have helped Bitcoin reach new heights. This achievement can keep Bitcoin as a leading digital asset for a long time. As the ecosystem is evolving continuously, it will be exciting to see Bitcoin heading towards $150,000 soon.