Bitcoin surpasses $100,000 again
The momentum coincides with the transition to President-elect Donald Trump’s administration, which is anticipated to create a more crypto-friendly regulatory environment.
Bitcoin has once again breached the $100,000 mark, trading at $101,700 as of 7 January, showing a strong resurgence after weeks of hovering between $92,000 and $98,000. This sharp rise is further fuelled by a massive surge in $120,000 call options, with over $1.56 billion in open interest, suggesting that traders are betting on a rally to new all-time highs. With the market showing renewed optimism, attention is shifting to upcoming changes in US crypto policy under President-elect Donald Trump, which could have a major impact on Bitcoin’s future.
As Trump prepares for his 20 January inauguration, many in the crypto industry are hopeful that his administration will bring a more crypto-friendly regulatory environment. A key change could be the resignation of SEC Chair Gary Gensler, a figure many crypto advocates view as an obstacle to the sector’s growth. His replacement, crypto-friendly Paul Atkins, may usher in a more supportive stance, especially regarding regulations for decentralized finance. Trump’s administration is also expected to explore initiatives like establishing a US Bitcoin reserve, further boosting the industry’s outlook.
Alongside these political developments, Bitcoin’s price performance is also influenced by broader macroeconomic factors. Economic reports in early January, including job creation and consumer sentiment data, could shape investor confidence, particularly if inflation concerns drive more interest in Bitcoin as a hedge against the dollar’s declining purchasing power. The Federal Reserve’s stance on interest rates will be pivotal, with the market expecting a neutral approach but keeping an eye on any unexpected policy shifts.
As Bitcoin pushes towards the $120,000 mark, analysts are divided on its short-term prospects. Some suggest the market is still in a “buy zone”, with potential for significant gains in the coming months, while others caution that market sentiment remains cautious. Regardless, the market is positioned for a potentially exciting year, with Bitcoin’s role as a key reserve asset likely to grow amidst shifting regulatory landscapes and economic conditions.
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The GIP Digital Watch Observatory team, consisting of over 30 digital policy experts from around the world, excels in the fields of research and analysis on digital policy issues. The team is backed by the creative prowess of Creative Lab Diplo and the technical expertise of the Diplo tech team.
