Cryptocurrency prices and stocks pared their early gains from Thursday after bitcoin hit a record high and finally cleared the highly-anticipated $100,000 threshold. The fresh all-time high comes after President-elect Donald Trump on Wednesday announced his nominee to lead the Securities Exchange Commission and a positive comparison from Federal Reserve Chair Jerome Powell.
Bitcoin spiked to $103,900 early Thursday, CoinMarketCap data shows, surpassing its previous high of $99,768 from early November. Bitcoin slid back near $99,200 by Thursday afternoon. The cryptocurrency has steadily tested new records in the wake of Trump securing his second Presidential term, which is expected to be much more in favor of digital assets.
"The price appreciation is driven by the perception of an incoming crypto-friendly administration resulting from Donald Trump's election victory, as well as an increase in accessibility to digital assets for investors via the introduction of new Exchange Trade Products and greater regulatory clarity globally," Pascal St-Jean, CEO of digital asset investment manager 3iQ wrote in a note shared with IBD.
Trump Appointments Help Boost Bitcoin Closer To $100,000
St-Jean added that although $100,000 was a significant price threshold for bitcoin, "the more significant takeaway is that this will increase the likelihood of institutions and traditional finance investment in the sector."
Bitcoin And Gold
The new high comes after President-elect Trump on Wednesday nominated conservative, crypto-friendly lawyer Paul Atkins to lead the Securities and Exchange Commission.
Atkins previously served as a Republican member of the SEC during the Bush administration, and has worked as co-chairman of crypto advocacy group Token Alliance since 2017, according to reports.
As head of the SEC, Atkins is expected to take a looser stance to cryptocurrency regulation than predecessor Gary Gensler. Gensler announced in late November that he would step down as SEC chair on Jan. 20, when Trump takes office.
Elsewhere Wednesday, Fed Chair Powell, while speaking at the New York Times DealBook Summit on Wednesday, said that bitcoin is a competitor to gold, and not the U.S. dollar.
"People use bitcoin as a speculative asset. It's like gold, it's just like gold — only it's digital. People are not using it as a form of payment or a store of value," he said. "It's highly volatile. It's not a competitor for the dollar; it's really a competitor for gold. That's really how I think about it"
"We believe the Fed Chair's comparison of bitcoin to gold is a significant development as it introduces another level of credibility to bitcoin as a major asset in global markets," Joel Kruger, market strategist at LMAX Group wrote. "The fact that gold is still about 10 times larger than bitcoin should offer additional insight into how much more room there is for bitcoin to grow from current levels."
Price Forecasts
Kruger in November noted that bitcoin could overshoot $100,000 this year and run through $110,000 before the year is out. Bernstein projects bitcoin will reach $200,000 by the end of 2025
Roppel Report founder Jim Roppel told IBD earlier this week that bitcoin could go even higher now that it hit the $100,000 mark.
"When a stock breaks a major round number, it not only hits it, it runs way past," Roppel said. He added that momentum behind bitcoin will continue, boosted by press coverage of the milestone and the stock market's risk-on mentality.
Bitcoin Rally Fades From Crypto Stocks
Bitcoin's rally boosted other cryptocurrency prices and related stocks early Thursday, but the gains were short-lived.
Ethereum surged as high as $3,944 early Thursday to approach its 52-week high around $4,090 from March. Ethereum is still trading below its record high of $4,890 from November 2021.
Crypto exchange Coinbase popped about 4% early Thursday, but reversed to a 3% decline..
MicroStrategy, which is acting like a bitcoin treasury, slid 4.8% after rallying more than 8% in the morning.
Bitdeer led bitcoin miners with a 17% leap early Thursday, but pared gains to 5.6%. Hut 8 rose more than 2% Thursday.
CleanSpark, Riot and Mara reversed from early rallies to slide about 5%.
Iren ticked lower, while Bit Digital fell 9%.
The iShares Bitcoin Trust and the other spot bitcoin ETFs were flat Thursday after swinging more than 4% higher in the morning.
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