‘The sky is the limit now’: Bitcoin surges past $US100,000 in Trump rally
By David Swan
Bitcoin has breached $US100,000 for the first time, surging to its highest price in history after US President-elect Donald Trump nominated a cryptocurrency advocate to chair the Securities and Exchange Commission (SEC), America’s financial markets regulator.
The world’s largest cryptocurrency has soared in value by more than 40 per cent in just four weeks, buoyed by the victory of Trump, who has promised to “end [President] Joe Biden’s war on crypto” and usher in pro-crypto regulations.
About 2pm AEDT on Thursday, bitcoin crossed the $US100,000 mark, hitting a new peak of $US100,027 ($155,520). And it kept rallying, trading at $US102,696 at 2.33pm on Bitstamp.
Bitcoin has been turbocharged since Donald Trump’s re-election.Credit: Bloomberg
The crypto sector outspent oil companies, banks and Elon Musk on the US election, and is hoping that cryptocurrencies like bitcoin will become mainstream financial products after once being dismissed as a fad.
“The sky is the limit for bitcoin now,” said Jason Titman, the chief executive of Australian crypto brokerage Swyftx.
“We started the year with BlackRock and other large investment funds entering the crypto market. We’ve ended it on the verge of sensible regulation in the US. You could not have sat down and scripted a better scenario.
“There is a sense of euphoria among local investors right now ... This is a momentum rally. Pure and simple.
“Local spot volumes are running at mid-pandemic levels and [Trump’s] nomination of Paul Atkins as SEC chair has just added to the sense of a carnival atmosphere.”
Reserve Bank governor Michele Bullock last month poured cold water on cryptocurrency, saying it had no role in the Australian economy or payments system.
“I don’t understand it,” she said. “But, you know, I don’t really see a role for it in, certainly in, the Australian economy or payments system.”
ASIC chair Joe Longo has also dismissed the recent rally in bitcoin and other crypto assets, saying it was an example of “the bigger fool theory”: the idea that people can make money on overvalued assets if those assets can later be resold at an even higher price to a bigger “fool”.
ASIC has indicated it will regulate crypto under existing financial product laws.
Josh Gilbert, market analyst at eToro, said bitcoin’s price milestone solidified its place within a diversified investment portfolio.
“If we look at past market cycles, it still feels like we’re reasonably early in this bull market,” Gilbert said.
eToro market analyst Josh Gilbert.
“Reaching the $US100,000 mark is undoubtedly a significant psychological level for many, and we may see some profit-taking along the way ... Draw-downs for bitcoin are par for the course, but it feels like it’s going to take something big to slow down bitcoin right now.”
Gilbert said digital currencies were just the beginning, with the underlying technology – blockchain – set to reshape finance just as the internet transformed communication, ushering in a new era of innovation.
“The years ahead are exciting,” he said.
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.