$100,000! Bitcoin Price Hits All-Time High Ushering in a New Era for Cryptocurrency?

$100,000! Bitcoin Price Hits All-Time High Ushering in a New Era for Cryptocurrency?On May 18, 2010, a user named Laszlo posted on a Bitcoin forum offering 10,000 Bitcoins (worth approximately $30 at the time) for two large pizzas. Four days later, Laszlo received his order

$100,000! Bitcoin Price Hits All-Time High Ushering in a New Era for Cryptocurrency?

On May 18, 2010, a user named Laszlo posted on a Bitcoin forum offering 10,000 Bitcoins (worth approximately $30 at the time) for two large pizzas. Four days later, Laszlo received his order. This seemingly ordinary transaction has become the start of a Bitcoin legend. Those 10,000 Bitcoins, worth $30 then, were worth approximately $1 billion on December 4, 2023, making it the most expensive pizza in history. Laszlo himself, a Florida programmer and early adopter of Bitcoin, mined Bitcoin from its inception, even developing software for mining using graphics cards. Mining was relatively easy back then, allowing Laszlo to quickly accumulate tens of thousands of Bitcoins. He doesn't regret the "astronomically expensive pizza" transaction; he stated he was very happy at the time, as he essentially got free pizza in exchange for using his graphics card. He later spent roughly 100,000 Bitcoins on various purchases, now worth tens of billions of dollars.

Laszlo's experience epitomizes Bitcoin's rise. In 2010, Bitcoin's price was just $0.003; today, it has surged past $100,000, a more than 30 million-fold increase in 14 years. This staggering growth has sparked much speculation about Bitcoin's future trajectory.

Milestone Moment: The Significance of Bitcoin Breaking $100,000

Bitcoin surpassing $100,000 marks a crucial step towards mainstream asset status and has attracted global market attention. Zhao Wei, senior researcher at OKX Research Institute, points out that this breakthrough is a significant milestone in the development of the cryptocurrency industry, further solidifying Bitcoin's position in the financial markets.

Two key announcements on December 4th propelled this surge. First, US President-elect Trump nominated conservative lawyer and crypto "enthusiast" Paul Atkins to chair the Securities and Exchange Commission (SEC). This news sparked market excitement. Atkins is known for his relatively relaxed regulatory stance and support for innovative technologies; his appointment could create a more favorable policy environment for the US cryptocurrency industry, boosting market confidence.

Second, Russian President Putin publicly expressed support for cryptocurrency and suggested the possibility of using it as an alternative reserve asset, providing additional momentum for Bitcoin's price increase.

Wang Peng, associate researcher at the Beijing Academy of Social Sciences, believes that Bitcoin breaking $100,000 is historically significant. It not only signifies the immense growth in Bitcoin's value since its inception but also reflects the booming global cryptocurrency market and investors' growing acceptance. This milestone will further boost investor confidence and potentially attract more capital into the cryptocurrency market.

Liu Bin, director of the Financial Research Office at the China (Shanghai) Pilot Free Trade Zone Research Institute (Pudong Reform and Development Research Institute), also views Bitcoin surpassing $100,000 as a major milestone, signifying a new phase in cryptocurrency development. He cites several reasons:

1. Increasingly refined regulation in the cryptocurrency field, particularly the US's recent development of international standards for cryptocurrency regulation, which increasingly impacts the global landscape.

2. International organizations, such as the Bank for International Settlements (BIS) and the Financial Stability Board (FSB), have done extensive work on cryptocurrency development and cross-border regulation, fostering consensus and aiding financial stability and risk mitigation.

3. Developed countries have established relatively comprehensive ecosystems around cryptocurrencies in recent years, with mainstream financial institutions developing regulatory-compliant financial infrastructure, achieving compliant organic integration between traditional financial systems and the cryptocurrency sector.

4. The BIS's proposed blockchain-based financial internet aims to unify traditional financial assets at the underlying financial infrastructure level through tokenization, and has received recognition from relevant countries positive news for cryptocurrencies.

5. Trump's election victory and relatively pro-cryptocurrency stance may lead to further supportive policies, serving as a crucial catalyst.

The approval of Bitcoin spot ETFs this year also signifies Bitcoin's transition from a "niche asset." Wang Peng argues this demonstrates a new level of institutional acceptance of Bitcoin. ETFs offer investors more diversified investment choices, lower barriers to entry, and reduced risk, attracting more capital into the cryptocurrency market.

The global economic digital transformation, continuous advancements in cryptocurrency technology, and public endorsements from key figures (like Trump) have all contributed to Bitcoin's price surge.

The "Trump Trade": A Sustainability Analysis

Bitcoin's price has increased by over 100% year-to-date, and by over 40% since Trump's election win. The "Trump Trade" has been a significant driver of Bitcoin's recent price surge, with various news items acting as catalysts.

Fueled by the "Trump Trade," the cryptocurrency market's spot trading volume in November reached $2.7 trillion, a high not seen since May 2021, more than double October's volume ($1.14 trillion). November's total Bitcoin futures trading volume reached $2.59 trillion, while Ethereum futures reached $1.28 trillion, also the highest since May 2021.

On November 21, current SEC Chair Gary Gensler announced his intention to step down on January 20, 2025, when Trump is inaugurated. Gensler is a known cryptocurrency skeptic who took a tough stance on the crypto industry during his tenure. Trump's December 4th nomination of Atkins to replace him sent the cryptocurrency market into another frenzy. Atkins has questioned the SEC's actions against cryptocurrency companies and is expected to take a more favorable approach to the cryptocurrency market.

Furthermore, Trump's team is discussing the creation of a new White House position dedicated to cryptocurrency policy a first for the White House.

Livio Weng, COO of HashKey Group and CEO of HashKey Exchange, believes Trump's support might influence older, traditional financial decision-makers, many of whom have been conservative or skeptical of Bitcoin. Trump's endorsement could prompt them to reassess the potential of crypto assets, increasing cryptocurrency's acceptance within mainstream finance.

Wang Peng believes Trump's policies, including his support for cryptocurrency and plans for a dedicated White House position for digital asset policy, have indeed catalyzed Bitcoin's price rise. These policy signals indicate a shift towards a friendlier US government stance on cryptocurrencies.

Can the "Trump Trade" last? Liu Bin thinks it might persist for a while, but any asset needs time and proof of its inherent value to gain widespread acceptance. Bitcoin is currently in an uptrend, but volatility is inevitable. Crucially, for Bitcoin to become a truly investable asset and digital gold, it needs to withstand cyclical tests and earn market and institutional recognition.

Wang Peng states the "Trump Trade's" duration depends on several factors, including the implementation of subsequent Trump administration policies, the overall development of the cryptocurrency market, and global economic conditions. If the Trump administration continues to roll out policies favorable to cryptocurrency development and implements them effectively, the "Trump Trade" could last longer. However, any policy's effect is limited and subject to many uncertainties, making its duration unpredictable. Despite Bitcoin's current high price, the risk of a correction remains. Investors should cautiously participate in Bitcoin and other cryptocurrency trading and manage risks effectively.

Zhao Wei also cautions that Bitcoin's high volatility remains a significant factor. In the short term, prices may face fluctuation risks due to profit-taking pressure and policy uncertainty. The global economic environment is constantly evolving, introducing uncertainty. However, in the long term, Bitcoin's investment value and practical applications are expanding, including its potential as a store of value and a cross-border payment method. With continued institutional investment and technological advancements, its position as a vital component of global asset allocation may further solidify.

Bitcoin's "Two Sides": Controversy and Consensus Coexist

Behind Bitcoin's surge, investor attitudes vary widely. Some institutions' acceptance has improved, but some value investors (like Buffett) remain skeptical.

Wang Peng believes Bitcoin's more than 30 million-fold increase over the past decade and a half reflects both a bubble element and fundamental support. On one hand, as a nascent digital asset, Bitcoin's price is susceptible to market sentiment and speculative behavior, creating bubbles; on the other, Bitcoin possesses fundamental advantages such as decentralization and scarcity, giving it some store-of-value and payment functionality.

The controversy surrounding Bitcoin stems primarily from:

1. The uncertainty surrounding Bitcoin's value and future prospects as a nascent digital asset.

2. Bitcoin's high volatility and susceptibility to various factors.

3. Divergent investor opinions and investment strategies regarding Bitcoin.

Liu Bin believes controversy surrounding Bitcoin is normal, like in the stock market where individual stocks have different perceptions among investors.