Bitcoin's next leap: Will Trump rally push it past $100k?

Six years ago, when bitcoin enthusiasts argued it would cost $100,000, they were ahead of their time. This forecast for the cryptocurrency, created by an anonymous developer and lacking a central authority, seemed absurd until this year's presidential election in the United States was won by Donald Trump.

According to coinmarketcap.com, on November 22, bitcoin was approximately $344 short of reaching $100,000. Over the weekend, the cryptocurrency slightly lost value—on Sunday evening, it cost about $96,000, which was 3.6% less than on Friday. On Monday, the price went back above $98,000.

- According to my assumptions, by the end of this year, the price of bitcoin could rise to as much as $120,000. However, 2025 will be a year of trial for cryptocurrency, predicts Daniel Kostecki, the chief market analyst at CMC Markets Poland, in an interview with money.pl.

Next year, the Federal Reserve, the U.S. central bank, intends to keep interest rates at a relatively high level, which, according to Kostecki, could cool down Wall Street investors' enthusiasm. The analyst adds that a counterbalance to the decline in bitcoin's price could be the creation of a strategic reserve in cryptocurrency in line with Donald Trump's election promise.

- The state will have to raise money to purchase bitcoins through bond issuance or from American taxpayers' pockets, which could sustain demand for cryptocurrency. However, it is unknown how society will react if the state wishes to spend billions of dollars on purchasing bitcoins, claims our interviewee.

It is estimated that the U.S. government holds about 200,000 bitcoins, mainly from confiscation. According to Trump’s announcements, within five years, they should reach a million, which is about 5% of the total cryptocurrency supply (21 million units).

During the presidential campaign, the Republican mentioned in rallies that he wanted to make the United States the world capital of cryptocurrencies. This was enough to draw large capital into the bitcoin market, but the rally began when it became clear that Trump won the election. On Thursday, November 7, a record $1.4 billion flowed into ETFs (Exchange Traded Funds - open collective investment schemes) investing in this cryptocurrency, of which as much as 81% of the amount went to the iShares Bitcoin Trust, a fund managed by BlackRock.

These spot investment funds reflect the current market value of Bitcoin and allow investors to purchase shares through traditional stock exchanges, avoiding direct involvement in the cryptocurrency market. The first such ETFs were formed in the United States this year after years of waiting for approval from the American supervisory authorities.

The rapid development of bitcoin ETFs will attract new institutional investors. These factors create ideal conditions for reaching new heights, believes Thomas Perfumo, strategic director of Kraken, a cryptocurrency exchange from San Francisco, California, interviewed by money.pl.

By giving the market the green light to launch spot funds in January 2024, Securities and Exchange Commission (SEC) Chairman Gary Gensler emphasized that this does not imply support for Bitcoin. The fact is that his days as the Commission's chairman are numbered. A few days ago, Gary Gensler announced that he will step down on January 20, when the president-elect's administration takes over. Thus, he will end his term characterized by a tough policy towards the virtual currency industry, preempting Donald Trump's move, who threatened to fire him when he assumed office as President of the United States.

In less than three weeks from November 6, bitcoin’s market capitalization increased by nearly $600 billion, reaching almost $2 trillion. Recently, news about Gensler has been a boon for the cryptocurrency rate, along with unconfirmed Bloomberg reports that the president-elect's team is in talks with the digital asset industry about creating a new position at the White House dedicated exclusively to cryptocurrency policy.

According to Bloomberg sources familiar with the matter, the person in this position would lead a small team and act as a liaison between Congress, the White House, and various agencies overseeing cryptocurrencies, such as the SEC or Commodity Futures Trading Commission. In this regard, Trump was reportedly to meet with former Coinbase Global and Binance.US director Brian Brooks, who is also a potential candidate for SEC chairman, and Coinbase Global CEO Brian Armstrong. The mentioned companies are cryptocurrency exchanges based in California.

- The post-election rally in the cryptocurrency market results from deferred demand, previously suppressed by uncertainty and lack of a clear regulatory vision in the United States. This factor, combined with positive macroeconomic forecasts for 2025, creates very favorable conditions for cryptocurrencies, says Thomas Perfumo.

According to him, the insane pace of this bull market should not surprise anyone.

- We are dealing with a rapid increase in demand for an asset with a fixed supply that does not respond to price signals. In the case of traditional commodities, such as oil or precious metals, mining and refining companies would increase production to satisfy demand. In the case of Bitcoin, it is entirely different, he asserts.

Over 94% of all bitcoins have already been mined using computers' computational power. The supply is about 0.8% annually and will decrease each year. With the current high demand for Bitcoin, Thomas Perfumo believes there is only one logical consequence: a price increase.

Not only is Kraken optimistic. Competitor Binance is as well.

We are witnessing huge interest in bitcoin and other cryptocurrencies. It is driven by many macroeconomic factors: interest rate cuts by the Fed, the prospect of a pro-cryptocurrency Trump administration taking power in the USA, the recent approval of bitcoin ETFs, and growing corporate interest in acquiring digital assets. While we cannot predict market behavior, which has always worked in bull and bear cycles, we remain long-term optimistic, says Natalia Kosińska, marketing manager at Binance, to money.pl.

She emphasizes that after every market correction, bitcoin has held above the previous cycle’s minimum. Eryk Szmyd, an analyst at the investment platform XTB, also notes this.

- If previous cycles could serve as a guide, the bull market should end around the third quarter of next year. However, there is no certainty that everything will go according to the scenario, as the activity of ETFs in the United States constitutes a new component of demand for bitcoin, notes the money.pl interviewee.

Based on the cycles of previous years, XTB analysts forecast that bitcoin’s price during this bull market could rise to about $160,000. In contrast, ethereum's price — the second cryptocurrency in terms of capitalization — could reach $10,000. Seen as Ethereum’s main competitor, Solana — according to Szmyd — has a chance to exceed the $1,000 level. Ripple, on the other hand, could grow to around five dollars under good circumstances.

However, Peter Schiff, an American economist, critic of bitcoin, and gold advocate, is full of doubts. In his podcast, he commented on the sharp rise in bitcoin's rate, claiming that technology company MicroStrategy is responsible for inflating the bubble.

It’s a public company that buys bitcoins with money from debt securities. On Thursday, it announced the completion of a $3 billion issue to increase its cryptocurrency reserve. According to Schiff, this capital injection boosted the digital currency’s rate above $99,000 last week. This gambling approach could end in disaster—at least that’s what Schiff believes.

There are at least several thousand types of cryptocurrencies on the market, valued at about $3.4 trillion. Bitcoin's share of this amount constitutes 58%, and Ethereum's 12%. Thomas Perfumo estimates that about 10% of the world’s population currently has access to cryptocurrencies, while two-thirds of humanity already has internet access. According to Kraken's representative, a billion new cryptocurrency users are expected in the next two or three years if the industry's growth pace continues.

The Financial Supervision Authority (KNF), similar to the SEC under Joe Biden’s administration, has a very cautious approach to cryptocurrencies. The position of the Polish financial market supervisor remains unchanged, noting that virtual currencies carry a high exchange rate risk, potentially leading investors to sudden losses and unpredictable results. Additionally, KNF warns market participants about hackers targeting cryptocurrency exchanges and wallets and fraudsters impersonating investment platforms aiming to wipe out the victim’s account.