Bitcoin’s climb toward the $100,000 milestone accelerated on Thursday, fueled by investor optimism over a potentially more crypto-friendly regulatory stance under President-elect Donald Trump. The cryptocurrency surpassed $99,300 for the first time during European trading, gaining roughly 4% on the day. It has more than doubled in value this year and surged about 40% in the two weeks since Trump’s election, alongside a wave of pro-crypto lawmakers securing seats in Congress.
The rise in Bitcoin’s futures basis, a key measure of market expectations for the cryptocurrency, suggests that traders expect prices to continue rising in the coming months. The metric is calculated by subtracting the price of one contract from the price of the other, and it tends to increase when markets expect a future price rally. Traders also see Trump’s promise to make the United States the “crypto capital of the world” as further fuel for speculation that his presidency will bring a less hostile regulatory environment for digital assets.
Further, the fact that futures contracts are available for cryptocurrency has helped to bolster investor confidence. This is a sign that the Bitcoin market is maturing and can be trusted to deliver the liquidity needed to support the growing demand for cryptocurrencies, which, in turn, has fueled the recent rally.
Analysts in the cryptocurrency space are optimistic about the potential for Bitcoin’s growth to continue, potentially pushing BTC to the 100,000 mark and beyond. This positive outlook is largely driven by the growing institutional demand for Bitcoin ETFs and options, which are expected to launch soon, and is a key factor in bolstering investor confidence in the cryptocurrency market.
While some investors remain cautious about the cryptocurrency market, there is growing interest in the potential for Bitcoin to be used as an alternative to fiat currencies. Nick Colas, chief investment officer at Data Trek Research, sees this potential, even as he remains cautious due to Bitcoin’s perceived lack of ‘real assessable value.’
Meanwhile, the Ethereum market also posted gains on Thursday, with the ETH/BTC ratio reaching its highest since March 2021. However, the rise was more muted than in Bitcoin’s case. Expectations largely drove that a blockbuster earnings release from chipmaker Nvidia would propel the broader technology sector higher. In Asian markets, investors were also taking cues from Wall Street, with softer consumer price index (CPI) inflation data reducing the prospect of extended high interest rates. According to analysts, this should also encourage investors to seek out riskier assets like cryptocurrencies. Traders are also awaiting the Federal Reserve’s decision on interest rates, which will be vital in determining whether to keep interest rates low for an extended period. This will be a critical factor in determining the direction of global currencies, including the dollar and the euro.
