Bitcoin Breaks $100,000: A Milestone Moment and the Future of the "Trump Trade"

Bitcoin Breaks $100,000: A Milestone Moment and the Future of the "Trump Trade"In May 2010, programmer Laszlo Hanyecz purchased two pizzas with 10,000 Bitcoins, worth a mere $30 at the time. Today, those same Bitcoins are worth nearly $1 billion, a legendary testament to Bitcoin's meteoric rise

Bitcoin Breaks $100,000: A Milestone Moment and the Future of the "Trump Trade"

In May 2010, programmer Laszlo Hanyecz purchased two pizzas with 10,000 Bitcoins, worth a mere $30 at the time. Today, those same Bitcoins are worth nearly $1 billion, a legendary testament to Bitcoin's meteoric rise. On December 4th, 2024, Bitcoin's price surpassed $100,000 for the first time, setting a new all-time high. This milestone has not only captivated global markets but is widely seen as a significant benchmark in the cryptocurrency industry's development, further solidifying Bitcoin's position in the financial landscape. This achievement is the result of multiple contributing factors, with the key drivers being President-elect Trump's nomination of conservative lawyer Paul Atkins as chairman of the Securities and Exchange Commission (SEC), and President Putin's public support for cryptocurrencies, even suggesting their potential as alternative reserve assets.

A Milestone Moment: Bitcoin's Value Leap and Industry Development

Bitcoin reaching $100,000 marks another significant step towards mainstream asset status. Zhao Wei, a senior researcher at OKX Research Institute, points out that this breakthrough has not only attracted significant global attention but also cemented Bitcoin's position in the financial markets. Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, believes this historic event not only signifies the tremendous value growth Bitcoin has achieved since its inception but also reflects the booming global cryptocurrency market and investors' growing acceptance of Bitcoin. 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 considers Bitcoin breaking $100,000 a crucial milestone in cryptocurrency development, potentially signifying a new phase for cryptocurrencies like Bitcoin. He analyzes the underlying reasons:

1. Increasingly Refined Cryptocurrency Regulation: Especially in the US, the past few years have seen the gradual formation of international standards for cryptocurrency regulation, significantly impacting the field.

2. Efforts from International Organizations: International organizations like the Bank for International Settlements (BIS) and the Financial Stability Board (FSB) have dedicated significant efforts to cryptocurrency development and cross-border regulation, fostering a degree of consensus on financial stability and risk mitigation.

3. Mature Ecosystem in Developed Countries: Developed nations have built relatively robust ecosystems around cryptocurrencies in recent years. Mainstream financial institutions have also developed financial infrastructure compliant with regulations, enabling the compliant integration of traditional financial systems and the cryptocurrency sector, thus creating favorable conditions for cryptocurrency development.

4. The Push of a Financial Internet: The BIS's proposed Financial Internet, using blockchain as its underlying technology and aiming to unify traditional financial assets at the underlying financial infrastructure level through tokenization, has gained recognition from relevant countries a positive development for cryptocurrencies.

5. Policy Expectations Following Trump's Election: Trump's election victory has fostered a relatively positive outlook for cryptocurrency development, and the potential for further supportive policies acts as a catalyst.

The approval of Bitcoin spot ETFs also signifies Bitcoin's transition from a "niche asset," elevating institutional acceptance to another level. The introduction of ETFs provides investors with more diversified investment options, lowering the barrier to entry and risk, and helping to attract more capital into the cryptocurrency market. The global digital transformation of the economy and continuous advancements in cryptocurrency technology are leading more investors to recognize the value of Bitcoin as a decentralized, scarce digital asset. Public endorsements from key figures, such as Trump's support for cryptocurrencies, have also contributed to Bitcoin's price surge.

The "Trump Trade": A Catalyst for Bitcoin's Rise and its Sustainability

Bitcoin's price has increased by over 100% year-to-date. Since Trump's election win, Bitcoin has risen by over 40%. The "Trump Trade" has become a significant driver for Bitcoin recently, with a series of news events acting as catalysts for the price surge. Fueled by the "Trump Trade," cryptocurrency spot trading volume in November reached $2.7 trillion, the highest since May 2021 and more than double October's volume. November's total trading volume for Bitcoin futures on trading platforms reached $2.59 trillion, and Ethereum futures hit $1.28 trillion, also marking the highest levels since May 2021.

Trump's nomination of Atkins as SEC chairman sent the cryptocurrency market into another frenzy. Atkins has previously questioned the SEC's actions against cryptocurrency companies and is expected to adopt a more favorable approach towards the cryptocurrency market. Many other Republicans also hope the SEC will adopt a friendlier stance towards the cryptocurrency market than under the Biden administration. Furthermore, Trump's team is discussing the creation of a new White House position specifically dedicated to cryptocurrency policy.

Livio Weng, COO of HashKey Group and CEO of HashKey Exchange, believes that Trump's support could also influence more established traditional financial decision-makers, many of whom have held conservative or even skeptical views on Bitcoin. However, Trump's endorsement may lead them to reconsider the potential of crypto assets and increase the acceptance of cryptocurrencies within the mainstream financial sector.

Wang Peng analyzes that Trump's policies, including his support for cryptocurrencies and plans to establish a dedicated White House position for digital asset policy, have indeed acted as catalysts for Bitcoin's price surge. These policy signals indicate that the US government's attitude towards cryptocurrencies is becoming increasingly positive, providing a favorable policy environment for the development of Bitcoin and other cryptocurrencies.

However, the sustainability of the "Trump Trade" remains questionable. Liu Bin believes the "Trump Trade" might last for some time, but for any asset class to gain widespread acceptance, it needs to withstand the test of time and demonstrate its inherent value. Bitcoin is currently in an upward cycle, but fluctuations are inevitable. Careful observation of whether Trump's policies after taking office meet market expectations is crucial. For Bitcoin to truly become an investable asset and digital gold, it must endure cyclical tests and gain market and institutional recognition.

Wang Peng argues that the duration of the "Trump Trade" depends on several factors, including the implementation of subsequent policies by the Trump administration, the overall development trend of the cryptocurrency market, and changes in the global economic environment. If the Trump administration continues to introduce and effectively implement policies favorable to cryptocurrency development, the "Trump Trade" could persist for a considerable period. However, the effects of any policy are limited and subject to various uncertainties, making the duration unpredictable.

Bitcoin's "Dual Nature": A Dialectical Unity of Bubble and Fundamentals

Bitcoin's price surge of over 30 million times in the past decade reflects both a speculative bubble and underlying fundamental support. On one hand, as a nascent digital asset, Bitcoin's price is susceptible to market sentiment and speculative behavior, leading to bubble formation. On the other hand, Bitcoin possesses fundamental advantages such as decentralization and scarcity, enabling it to function as a store of value and means of payment to a certain extent.

The controversies surrounding Bitcoin stem from several key points: first, as a novel digital asset, its value and future prospects are uncertain; second, the Bitcoin market is highly volatile, with prices susceptible to various factors; and third, investors hold differing views and investment strategies regarding Bitcoin.

Liu Bin considers the controversies surrounding Bitcoin a normal phenomenon, similar to the stock market where each stock holds different values in the eyes of different investors, reflecting varying perceptions. Bitcoin's journey from obscurity to a $100,000 price tag demonstrates a gradual market recognition of its value and acceptance as an investable asset.

Despite ongoing controversies, market acceptance of Bitcoin is steadily increasing. On November 21st, the asset management scale of US ETFs directly investing in Bitcoin exceeded $100 billion for the first time. The total assets under management of 12 US Bitcoin ETFs, including those from BlackRock and Fidelity Investments, reached approximately $104 billion, approaching the asset management scale of US gold ETFs (approximately $120 billion).

Can Bitcoin Rival Gold?

Bitcoin has the potential to become digital gold, rivaling gold as a significant asset. If Trump truly establishes a Bitcoin national reserve and introduces further supportive policies, coupled with a relatively favorable monetary policy and external environment, it could accelerate Bitcoin's asset-ization, further strengthening its status as digital gold.

Bitcoin and gold share certain similarities, such as scarcity and store-of-value functions. With the global digital transformation of the economy and the continuous development of the cryptocurrency market, Bitcoin is expected to become a store-of-value tool comparable to gold in the future, although this still requires time and market validation. However, Bitcoin, as an emerging digital asset, differs significantly from gold in terms of attributes, uses, and market performance. In the long run, Bitcoin's future trajectory depends on the interplay of various factors, and uncertainty remains. On the one hand, Bitcoin, as a decentralized and scarce digital asset, may continue to attract investor attention and demand; on the other hand, Bitcoin faces numerous challenges and risks, such as regulatory uncertainty and high market volatility.

Embracing the Technological Revolution: Global Competition in the Web3 Era

While controversies surrounding Bitcoin persist and national policies vary, there's a general embrace of the underlying technology. In 2022, US Congressmen explicitly stated their aim to ensure the Web3 revolution occurs in