Bitcoin Crosses $100K, Retraces: The Significance Behind the Milestone

Bitcoin (BTC) made history by crossing the $100,000 threshold for the first time on the night of December 4th, marking a monumental moment for the cryptocurrency market. This surge, fueled by supportive remarks from Federal Reserve Chair Jerome Powell and President-elect Donald Trump’s pick for SEC Chair, sent Bitcoin soaring to a record high of $103,000 before briefly retracing.

Despite a rapid 5.47% dip the following day, which wiped out hundreds of millions in long positions and saw Bitcoin briefly touch $93,000, the cryptocurrency has shown resilience. As of this writing, Bitcoin is trading at $98,200 (December 6, 2024, 10:00 AM EST).

Trump and Powell’s Pro-Crypto Stance Drives Bitcoin Rally

Bitcoin investors celebrated as Trump announced Paul Atkins, a known crypto advocate, as the incoming Chair of the U.S. Securities and Exchange Commission (SEC). Atkins is set to replace Gary Gensler, who had a notably stringent approach toward cryptocurrency regulation. This leadership shift is expected to usher in a more favorable regulatory environment for digital assets.

Trump further boosted market sentiment with his congratulatory post on Truth Social:

“CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!! Together, we will Make America Great Again!”

The market has responded enthusiastically to Trump’s pro-crypto policies, with Bitcoin experiencing a significant rally since his election win. Meanwhile, Fed Chair Powell added to the optimism by likening Bitcoin to gold:

“It’s not a competitor for the dollar. It’s really a competitor for gold.”

This rare acknowledgment from a policymaker underscores Bitcoin’s growing reputation as a digital store of value.

Limited Supply: A Catalyst for Future Growth

Bitcoin’s finite supply of 21 million coins remains one of its most compelling features. Basic economic principles—scarcity combined with increasing demand—suggest that Bitcoin’s value will likely rise over time, despite short-term volatility.

Analysts at Bernstein predict Bitcoin could hit $200,000 by late 2025, $500,000 by 2029, and even $1 million by 2033. Current technical analysis points to a potential rally toward $129,930, with support levels at $90,500 and $80,500 should profit-taking spark a pullback.

MicroStrategy’s Chairman Michael Saylor echoed these bullish sentiments, highlighting Bitcoin’s outperformance compared to traditional markets and commodities like gold. While MicroStrategy’s stock rose as much as 10% intraday on December 5th, it closed 4% lower—reflecting the broader market’s inherent volatility.

“Volatility is a feature, not a bug,” Saylor remarked during an interview with CNBC, emphasizing Bitcoin’s 24/7 global trading nature as a key advantage.

Where Is Bitcoin Headed Next?

The broader cryptocurrency market has swelled to a total market cap of $3.7 trillion, according to CoinMarketCap. This latest rally comes as investors and analysts align around the belief that pro-crypto policies under the Trump administration could drive further growth.

While Bitcoin’s journey beyond $100,000 is seen as a significant milestone, the question remains: Is this the peak, or is there more to come? As the crypto community continues to ride this wave of optimism, many are betting that Bitcoin’s best days are still ahead.

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