Bitcoin Breaks $100,000: A Double Effect of Institutional Investment Surge and Trump's Inauguration

Bitcoin Breaks $100,000: A Double Effect of Institutional Investment Surge and Trump's InaugurationOn the evening of January 6th, Bitcoin (BTC) price surged past the $100,000 mark, reaching $101,917.5, a new high since December 19th, 2024, representing a 2

Bitcoin Breaks $100,000: A Double Effect of Institutional Investment Surge and Trump's Inauguration

On the evening of January 6th, Bitcoin (BTC) price surged past the $100,000 mark, reaching $101,917.5, a new high since December 19th, 2024, representing a 2.58% increase in 24 hours. This breakthrough wasn't limited to Bitcoin; other cryptocurrencies like Ethereum and Solana also experienced simultaneous price increases. Zheng Lei, Chief Economist of Samoyed Cloud Technology Group, attributes this price surge to the growing market acceptance of digital currencies, the widespread application of blockchain technology enhancing its value recognition, and increased safe-haven demand for digital currencies amidst global financial market volatility. Zheng Lei also cautioned investors to fully understand the risks and characteristics of the digital currency market, choose reputable trading platforms, adhere to the principle of diversification, and avoid making wrong investment decisions due to short-term fluctuations.

High Institutional Investment Enthusiasm and Continued Bitcoin Accumulation

Entering 2025, the enthusiasm of institutional investors towards cryptocurrencies has remained high, becoming a significant driver of Bitcoin's price increase. MicroStrategy again made a large-scale purchase of Bitcoin, spending approximately $101 million to acquire 1,070 BTC at an average price of around $94,000, bringing its total Bitcoin holdings to approximately 450,000 BTC with an average purchase price of around $62,503. NYSE-listed company KULRTechnology also increased its holdings by 213.43 BTC (valued at approximately $21 million), reaching 430.61 BTC as of January 6th. Japanese listed company Metaplanet even plans to expand its Bitcoin holdings to 10,000 BTC in 2025, currently holding 1,762 BTC valued at approximately $176 million. The company's CEO stated they will achieve this goal using the most value-added capital market tools.

Furthermore, regulatory filings show that Nasdaq has applied to the U.S. Securities and Exchange Commission (SEC) to increase the holding limit of BlackRock's spot Bitcoin ETF (IBIT) from 25,000 shares to 250,000 shares. This move also suggests continued institutional optimism towards Bitcoin. Zhi Pei Yuan, Vice President of the Investment Committee of Listed Companies of the China Investment Association, stated that the accumulation by institutions like MicroStrategy reflects positive demand for Bitcoin, and institutional investor actions are often seen as positive market signals, attracting more investors to follow suit and thus driving up prices. He also pointed out that the regulatory attitudes towards digital currencies vary greatly across countries, and the future development of national regulatory frameworks will significantly impact Bitcoin's price trend. The improvement of the regulatory framework and the enhancement of Bitcoin's legality and compliance will support price increases, while stricter regulation may lead to price declines.

Bitcoin Mining Companies Actively Accumulating, Intensifying Market Upward Momentum

Bitcoin mining companies have also become a major force in Bitcoin reserves. According to incomplete statistics, multiple mining companies, including Mara Holdings, Riot Platforms, and CleanSpark, have raised over $3.7 billion since November 2024, using the funds to purchase Bitcoin. For example, Bitcoin mining company MARA purchased 22,065 Bitcoins at an average price of $87,205 in 2024 and mined 9,457, bringing its total reserves to 44,893 Bitcoins, worth over $4.4 billion at current prices. MARA CEO Fred Thiel stated that the dual strategy of mining and purchasing enhances the company's flexibility and helps improve long-term shareholder value.

Market Expectations and Risks Coexist: Investors Should Exercise Caution

Gao Chengyuan, Chairman and CEO of Tiaoyuan Consulting, believes that the Bitcoin price increase reflects the market's optimistic expectations for its future value. Several institutions predict that Bitcoin's price will continue to rise in 2025, ranging from $80,000 to $250,000. This trend is mainly driven by continued institutional buying, expectations of loose monetary policy, and technological advancements. However, Gao Chengyuan also reminds investors that Bitcoin's price volatility is significant, and they should be cautious about short-term fluctuations and focus on long-term trends and fundamental factors. A recent report from research firm 10xResearch points out that while market enthusiasm is high at the start of the year, it doesn't necessarily mean a repeat of the bullish market of 2024. The report predicts a positive performance for Bitcoin at the beginning of the year, but a slight pullback may occur before the release of CPI data on January 15th. Positive inflation data could reignite market optimism.

Trump's Inauguration's Impact on the Market: Positive Expectations and Cautious Analysis

Trump's upcoming inauguration as U.S. President this month is considered one of the key factors driving Bitcoin past $100,000. Gao Chengyuan believes that Trump's inauguration could have a positive impact on Bitcoin prices. Trump has previously publicly supported the cryptocurrency industry and pledged to promote related legislation and policies, and this policy-positive expectation has already driven a significant increase in Bitcoin prices after the election. However, the effectiveness of policy implementation and market reaction remain uncertain, and investors need to closely monitor policy progress and market response. Furthermore, other policy directions of the Trump administration could indirectly affect the Bitcoin market.

Jiang Han, a senior researcher at Pangu Think Tank, believes that the impact of Trump's inauguration on the price may be relatively limited. Bitcoin prices are primarily influenced by factors such as market supply and demand, investor sentiment, and the global economic environment. Trump's policies may indirectly affect the Bitcoin market, but the impact is usually indirect and complex and is unlikely to be a key determinant of price trends.

Market Cycle and Risk Warning: Rational Investment and Prudent Response

Analysts at CryptoQuant suggest that the market may be in the late stages of this cycle, with a large influx of new investment and additional funds from existing investors, suggesting the bull market may peak in the first or second quarter of 2025. The analyst recommends that while significant price increases for Bitcoin and altcoins are anticipated, a conservative approach to risk management should be adopted. Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, also reminds investors that market volatility risk, regulatory risk, security risk, liquidity risk, and technological risk will all affect Bitcoin prices. Investors should fully understand the market, invest cautiously, choose secure trading platforms, diversify their investments, and pay attention to changes in global policies, regulations, and market demand, adjusting their investment strategies accordingly.

In summary, Bitcoin surpassing $100,000 is the result of multiple factors working together, including continued institutional accumulation, optimistic market expectations, and potential policy benefits. However, investors still need to remain rational, carefully assess market risks, and develop sound investment strategies to achieve stable returns in the cryptocurrency market, which is full of both opportunities and challenges.