Bitcoin catapulted above US$100 000 for the first time on Thursday, a milestone hailed even by sceptics as a coming-of-age for cryptocurrencies as investors bet on a friendly US administration to cement cryptos’ place in financial markets.

The total value of the cryptocurrency market has almost doubled over the year so far to hit a record just shy of US$3.8-trillion, according to data provider CoinGecko. By comparison, Apple alone is worth about $3.7-trillion.

Bitcoin’s march from the libertarian fringe to Wall Street has minted millionaires, a new asset class and popularised the concept of “decentralised finance” in a volatile and often controversial period since its creation 16 years ago.

Bitcoin has more than doubled in value this year and is up more than 50% in the four weeks since Donald Trump’s sweeping election victory in the US, which also saw a slew of pro-crypto lawmakers being elected to congress.

Once it broke $100 000 in Thursday’s Asian morning, it was soon above $103 000 and was last fetching $103 335. “We’re witnessing a paradigm shift,” said Mike Novogratz, founder and CEO of US crypto firm Galaxy Digital.

“Bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream — this momentum is fuelled by institutional adoption, advancements in tokenisation and payments, and a clearer regulatory path.”

Trump embraced digital assets during his campaign, promising to make the US the “crypto capital of the planet” and to accumulate a national stockpile of bitcoin.

Hand over fist

“We were trading basically sideways for about seven months, then immediately after 5 November, US investors resumed buying hand over fist,” said Joe McCann, CEO and founder of Asymmetric, a Miami digital assets hedge fund.

On Wednesday, Trump said he would nominate Paul Atkins to run the Securities and Exchange Commission. Atkins, a former SEC commissioner, has been involved in crypto policy as co-chair of the Token Alliance, which works to “develop best practices for digital asset issuances and trading platforms”, and the Chamber of Digital Commerce.

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“Atkins will offer a new perspective, anchored by a deep understanding of the digital asset ecosystem,” said Blockchain Association CEO Kristin Smith. “We look forward to working with him … and ushering in – together – a new wave of American crypto innovation.”

A slew of crypto companies including Ripple, Kraken and Circle are also jostling for a seat on Trump’s promised crypto advisory council.

Bitcoin has proven a survivor through precipitous downturns.

Its move into six-figure territory is a remarkable comeback from a dip below $16 000 in 2022 when the industry was reeling from the collapse of the FTX exchange. Founder Sam Bankman-Fried was subsequently jailed.

Analysts say the growing embrace of bitcoin by big investors this year has been a driving force behind the record-breaking rally.

US-listed bitcoin exchange-traded funds were approved in January and have been a conduit for large-scale buying, with more than $4-billion streaming into these funds since the election.

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“Roughly 3% of the total supply of bitcoins that will ever exist have been purchased in 2024 by institutional money,” said Geoff Kendrick, global head of digital assets research at Standard Chartered.

“Digital assets, as an asset class, is becoming normalised,” he said. “If you fast-forward a number of years on trading floors, you’ll have a sales and trading desk … which will sit alongside FX and rates and commodities.” — (c) 2024 Reuters

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