Bitcoin Soars Past the $100,000 Mark in 2025, Boosted by a Trump-Fueled Rally
Bitcoin soared past the $100,000 mark for the first time this year on January 3, 2025, fueled by a flurry of factors. The world's leading cryptocurrency by market value touched $102,700 as per Coinbase data sourced from TradingView. This represented a 4% jump in less than 24 hours, rebounding from the $99,000 mark earlier in the day.
Interestingly, Bitcoin had struggled to breach the $100,000 barrier in the initial weeks of 2025, despite hitting an all-time high of over $108,000 on December 24, 2024.
Trump Factor
Some analysts attributed the latest Bitcoin surge to the impending inauguration of President-Elect Donald Trump, slated for January 20, 2025. They believed that his administration's policies would be crypto-friendly and potentially lead to pro-crypto regulations.
The anticipated tax-cut policies and friendly regulation policies for cryptocurrencies could further bolster investor sentiment, according to Greg Magadini, director of derivatives for digital asset data provider Amberdata.
US Investor Demand
CryptoQuant analyst Julio Moreno suggested that the recent surge could be due to the return of US investors to the market after the New Year holidays. He pointed to changes in the CryptoQuant's Coinbase Premium Index for Bitcoin, which measures the difference between Coinbase Pro price and Binance price. A positive index indicates higher demand in the US market.
Underlying Factors
Beyond the Trump 'rally', several other factors have contributed to Bitcoin's price surge. These include:
- Institutional Interest and Capital Inflow: Companies like MicroStrategy and Metaplanet have signaled their confidence in Bitcoin's long-term value by announcing plans to increase their holdings. Institutional investments have also flowed into Bitcoin ETFs, such as Fidelity's Wise Origin Bitcoin Fund and BlackRock’s iShare Bitcoin Trust.
- Macro Trends and Economic Environment: Anticipated interest rate cuts and liquidity injections could positively impact risk assets, such as Bitcoin. Furthermore, Bitcoin's status as a digital gold and hedge asset gains traction amidst weakening US dollar and persistent inflation pressures.
- Political and Regulatory Factors: The impending Trump administration's crypto-friendly policies are expected to support pro-crypto regulations, potentially driving up Bitcoin's price.
- Technical and Psychological Factors: The $100,000 mark is a significant psychological and technical resistance level, breaching which could trigger an upward momentum. Additionally, a nearly 100% increase in options trade volume could contribute to the price surge.
- Market Sentiment and Historical Context: Bitcoin's recent price surge is partly driven by its historical milestones, such as the 2024 breakthrough of $100,000 and the 2017 bull run. The recent surge could also be attributed to the lack of retail participation, offering untapped potential for market expansion.
These factors collectively contribute to the current Bitcoin price surge beyond the Trump factor.
The surge in Bitcoin prices beyond the $100,000 mark this year can also be attributed to the growing interest in digital currencies as a form of digital asset. Many institutions, such as MicroStrategy and Metaplanet, have shown their confidence in Bitcoin's long-term value by increasing their holdings or investing in Bitcoin ETFs.
The Trump administration's anticipated tax-cut policies and friendly regulations towards cryptocurrencies could further bolster investor sentiment, potentially leading to increased demand for cryptocurrencies like Bitcoin. This, coupled with the breach of the $100,000 psychological and technical resistance level, could trigger an upward momentum in Bitcoin prices.
