Bitcoin Briefly Surpasses $100,000 Mark

2 min Read

The recent surge in Bitcoin is undoubtedly driven by psychology, but also by anticipated future developments in the USA. Many private investors are already speculating with the cryptocurrency. However, consumer advocates are warning about the high risks.

Had you invested just one dollar in Bitcoin in October 2009, you would be a millionaire today, with a gain of around 130 million dollars, as calculated by ChannelPartner. At that time, the cryptocurrency was only a year old. On the night of December 2-3, 2024, it briefly reached 103,253 dollars per unit. By December 10, just a week later, the price had settled at approximately 97,800 dollars or 92,555 Euro.

One reason for the recent surge is likely the shift of former and likely future US President Donald Trump from skeptic to crypto advocate. Additionally, Paul Atkins is set to become the head of the powerful US Securities and Exchange Commission (SEC).

The SEC is setting the course

The incumbent Gary Gensler was known for his tough stance against cryptocurrencies, but on November 21st he announced that he would step down with the return of Trump to the White House.

As ChannelPartner further reports, Gensler was always a red flag for many crypto investors, especially since he introduced strict regulations for digital currency trading during his tenure as SEC chair and took a hard line against fraud cases involving crypto assets.

If Trump’s preferred candidate Atkins indeed becomes SEC chair, experts expect that, in addition to Bitcoin and Ether, further crypto ETFs (Exchange Traded Funds) will be approved in the USA. And this could fuel speculation with cryptocurrencies.

Will Bitcoin Replace US Gold Reserves?

Investors are already betting that the new US government under Trump will use Bitcoin to counterbalance gold reserves, which would give the oldest and most traded cryptocurrency even more momentum. The US sits on gold reserves of 8,100 tonnes of the precious metal, valued at 670 billion dollars, in Fort Knox and other locations.

As of January 2022, Germany held 3,359 tonnes of gold, placing it in second position, while the International Monetary Fund (IMF) held 2,814 tonnes, ranking third.

It remained unclear during the election campaign whether the new US government intended to convert seized Bitcoin holdings from criminals into Bitcoin reserves or actively purchase Bitcoin, as suggested by a Republican senator. She proposed buying over five years one million Bitcoin and holding them as reserves for at least 20 years. Given the maximum supply of 21 million Bitcoin, the US holdings would eventually account for nearly 4.8 percent of the total supply.

“Consumer advocates, however, warn of the high risks.”

Bitcoin investment is highly speculative

Some institutional providers have even announced new debts for the issuance of convertible bonds to invest the money in Bitcoin. The recent price surge has also been fueled by the fact that since January 2024, not only Bitcoin ETFs but also Bitcoin options, i.e., bets on the price trend, have been permitted.

However, this is highly speculative and could reignite the Bitcoin boom at the expense of the real economy, as critics warn. Crypto mining also requires very high computing power, which impacts energy consumption and the environment.

While some YouTube influencers encourage private investors to buy, consumer advocates strongly warn against catching the “crypto fever.” They see risks in massive price fluctuations up to total loss, not to mention the lack of security systems.

Source image: Unsplash / Traxer