Since the election of Donald Trump, Bitcoin has set new records. In the space of a few days, the price of the cryptocurrency rose from $70,000 to $93,000. In accordance with his campaign promises, Donald Trump should work to relaxation of the regulatory framework around digital currencies, in particular by dismissing the head of the SEC, the financial regulator of the United States.
In addition, he plans to set up a strategic reserve of bitcoins to make the United States the crypto capital of the world. This is why the entire cryptocurrency sector is currently in turmoil.
“Crypto stocks, such as those of publicly traded bitcoin mining companies and proxies including Microstrategy and Coinbase, have also been among the best performing instruments in the stock markets since the election results”analyzes Simon Peters, market analyst at eToro, in a reaction addressed to 01Net.
A predictable rise in Bitcoin?
Stimulated by Bitcoin, the entire cryptocurrency market is showing green. The overall valuation of the ecosystem has risen beyond $3.1 trillion. It is a historic record for the world of digital currencies, which definitively puts aside the traumas of 2022, including the brutal death of FTX and the stablecoin UST.
The Bitcoin boom is also benefiting from factors other than Donald Trump's victory. The price of the cryptocurrency has in fact benefited from the famous halving, which occurred last April. In the eyes of Agne Linge, responsible for the growth of the neobank WeFi, the price increase was therefore predictable. From a historical perspective, Bitcoin starts “still its post-Bitcoin halving rally around October, usually peaking in November or December”.
“This trend was evident in 2017 and 2021, and appears to be repeating this year”recalls Agne Linge in a reaction sent to 01Net.
Also read: Dogecoin is doing better than Bitcoin, and it’s still thanks to Elon Musk
Heading towards $100,000?
For many observers, this is only the start of the new bull market Bitcoin and cryptocurrencies. On his X account, Éric Larchevêque, co-founder of the French unicorn Ledger, pulls no punches and predicts “that it will exceed $100k by the end of the year”. He goes even further and ensures that the price of Bitcoin “will reach $250k before the end of May 2025”.
To justify his predictions, the entrepreneur highlights the implementation ofa strategic reserve of bitcoins in the United States. This is not just a promise made by Donald Trump to convince cryptocurrency holders.
Ahead of the elections, the Republican senator Cynthia Lummis unveiled a proposed law along these lines. After Trump's victory, the Wyoming senator confirmed her intentions by indicating that she wants to pass the “Bitcoin Act” within the first 100 days of Donald Trump's mandate. She adds that this reservation could partly be based on the conversion of the United States gold stock and bitcoins.
In the wake of the United States, other powers could begin to accumulate Bitcoin, which should mechanically inflate the price of the asset. For Simon Peters, this trend could “act as a powerful lever for the price of bitcoin, propelling it well beyond six figures”. But, as the analyst explains to us, it is impossible to “how far the price of bitcoin will go remains uncertain”.
Mirroring the co-founder of Ledger, a large part of observers however adhere to the story of a Bitcoin trading at $100,000 before the end of the year. Questioned by CoinTelegraph, Lennix Lai, the commercial director of the OKX exchange, sees “signals of a paradigm shift” which indicate that Bitcoin will finally cross the $100,000 threshold. Geoff Kendrick, analyst at Standard Chartered bank, specifies that “we could reasonably achieve this by, frankly, Inauguration Day” of Donald Trump, reports CNBC.
Same story from Josh Gilbert, eToro analyst. For the financial expert, the market has not yet reached “levels of euphoria” of previous cycles. Like Eric Larcheveque, Guy Armoni, managing partner of the HDI Fund, sees further and cheerfully prophesies a Bitcoin for more than 200,000 dollars in the coming months:
“If this trend continues, not only will we see Bitcoin at $100,000 this year, but I predict the bull market will extend into 2025, with Bitcoin potentially surprising us by reaching as high as $250,000.”
The return of volatility and the threat of a correction
Even if Bitcoin heads towards $100,000, or goes even higher, we must expect declines, or even sudden tumbles. As Éric Larchevêque points out, it is far from impossible for the price of Bitcoin to fall back to “$50k by then before going back up (because the volatility is extreme”. The more quickly and significantly an asset sees its price rise or fall, the higher its volatility. These roller coasters have punctuated the life of Bitcoin since its creation in 2009.
Agne Linge issues a similar warning to investors. The head of WeFi believes that some of the holders risk of selling their bitcoins to generate profits when certain thresholds are reached. It is common for investors to withdraw some of their gains as Bitcoin explodes higher:
“With 100% of Bitcoin investors currently in profit, profit-taking could soon begin, as happens in all financial markets.”
In other words, “the market could continue to grow until the end of November, followed by a possible correction”. This correction, that is to say a notable, but temporary, drop in the price of an asset or a market after a period of strong increase, is expected “healthy”. This could lead to “a new massive recovery in prices”.
In the eyes of some observers, the correction promises to be particularly harsh. CryptoQuant CEO Ki Young Ju Even Fears Bitcoin Price Ends 2024 below $60,000. It is far from impossible and the history of Bitcoin has proven this several times. Since its birth, cryptocurrency has very often collapsed, losing a large part of its value in a few days, even in a few hours. Two years ago, the price of Bitcoin even fell below $20,000, weighed down by the wind of panic that blew during the fall of FTX. In the eyes of Michael Saylor, CEO of MicroStrategy and fervent defender of Bitcoin, there is nevertheless no reason for the price of Bitcoin to decline sharply in the near future. For him, it goes without saying that he will organize “a $100,000 party” before New Year's Eve.
Post-inauguration, an abyss of uncertainty?
Some investors also fear a severe correction after the inauguration of Donald Trump. If the Republican does not keep his promises, or delays in keeping them, disappointment could take precedence over optimism which currently reigns in the cryptoasset market. This is the opinion of Tim Kravchunovsky, founder and CEO of Chirp, on CryptoNews:
“If all the promises made by Trump during his campaign come to fruition, there is indeed reason to be optimistic about the future of cryptocurrencies in the United States. However, the situation could still evolve in one direction or the other. Once the initial euphoria has subsided, we will have to observe whether Trump really keeps his commitments.”
This wave of disillusionment could help drive prices downwhich would compromise the prospect of an increase stretching well beyond $100,000. This is why the first months of Donald Trump's second term will be closely scrutinized by investors, speculators and holders of cryptocurrencies…
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