Bitcoin reached an all-time high of over $93,000 on Wednesday, 13th November 2024. The largest cryptocurrency’s price was around $67,000 at the start of November, and it has shown no signs of slowing since then. From the historic low of around $16,000 in 2022, this rise showcases a close to 600% returns in two years. Although Bitcoin’s price has been increasing steadily since the start of 2023, the US elections gave it the perfect boost to cross the $90,000 mark and reach a fresh all-time high.
However, many other factors besides the US elections are fueling this rally. Let’s learn more about these factors and where Bitcoin is headed in 2025.
Why Is Bitcoin’s Price Increasing to a New All-Time High?
Factors including Donald Trump’s possible election win, the halving effect, and growing investor interest are some of the primary reasons why Bitcoin is witnessing a sudden price surge.
US Elections
On election night, Bitcoin was trading below $70,000. However, when the real-time voting trends were out, the cryptocurrency increased by around 3% to close above $70,000. As the trend became clear and Donald Trump won the elections, Bitcoin’s price started zeroing in on the $100,000 mark.
The US presidential elections have always been a major event for cryptocurrencies, especially Bitcoin. The largest crypto by price and market capitalization, it has seen four elections in its history, and after every election, Bitcoin’s price has increased.
However, it was a little different this time, as Donald Trump has been a major supporter of Bitcoin. In fact, he even established himself as a pro-crypto candidate during his election campaigns. He promised policy reformations around cryptocurrency and even said that he longs to make the USA the crypto capital of the world.
He even used Bitcoin to make a purchase at a New York bar after buying burgers for his fans. Since it was the first time any former president had used cryptocurrency to make a payment, it was hailed as a historic transaction. All these initiatives taken by Donald Trump have led to a positive outlook towards the cryptocurrency market.
Therefore, as soon as he was seen winning the elections, Bitcoin’s price rose more than 30% within a week.
Spot Bitcoin Exchange Traded Funds
The first Bitcoin futures Exchange Traded Fund (ETF) was introduced in October 2021. As CNBC notes, three other Bitcoin-linked futures ETFs were lined to be approved and officially debut in October 2021.
While Bitcoin futures ETFs are a great way to invest in cryptocurrency, they are contract-based. This means that they don’t provide any direct ownership of the cryptocurrency. On the other hand, spot Bitcoin ETFs offer you actual ownership of this cryptocurrency, enhancing its liquidity and offering you a more accessible and regulated means of entering the Bitcoin market.
Some of the common benefits of Bitcoin include:
- Direct Bitcoin ownership
- Easy-to-use
- More liquidity allows easy buying and selling opportunities
- Lower operational risks
All these benefits make spot Bitcoin ETFs a much more lucrative option than Bitcoin futures ETFs. Although Bitcoin futures ETFs have been tradable since 2021, spot ETFs were approved in January 2024. After rejecting many applications, the US Securities and Exchange Commission (SEC) finally approved the first spot Bitcoin ETF this year.
This has helped generate much interest and hype in Bitcoin, which has more than doubled since January 2024. As you can see in the image below, Bitcoin was trading at close to $42,000 on 1st January 2024, and it has surpassed the mark of $90,000 now, but it is currently trading just below $90,000.
The Halving Impact
The Bitcoin halving is a significant event for this cryptocurrency. It refers to the time when Bitcoin’s block reward for mining is cut in half; hence, the name. This lowers the supply of Bitcoin and maintains its demand, which further helps increase the price. When Satoshi Nakamoto first introduced Bitcoin in 2009, the block reward was a staggering 50 BTC (Bitcoin).
The first halving took place on 28 November 2012, when the reward was cut by half to 25 BTC. It was further reduced to 12.5 BTC during the second halving event on 9 July 2016. Next, on 11 May 202, the block reward was halved for the third time to $6.25 BTC. The last halving event occurred on 19 April 2024, when the reward became 3.125 BTC. The next session is expected in Mid-2028.
There are several reasons why Bitcoin’s block reward is halved every four years. Here are some important reasons you should know about:
- Control inflation
- Enhance the scarcity of BTC in the market
- Impact’s market sentiments (As it is a major event)
- Ensures long-term sustainability
Both the halving event and the US presidential elections are held in the same year, at an interval of four years. Therefore, Bitcoin becomes more volatile during this time. However, the good thing is that both these events have usually had a positive impact on Bitcoin’s price. Together, these events can potentially help Bitcoin reach new all-time highs.
Increasing Adoption
As you would have noticed, adoption of Bitcoin has increased multifold over the years. Many countries now have transparent regulations around the cryptocurrency. In fact, several stores are also accepting Bitcoin as payments for purchasing goods and services. Popular brands like Apple, Aveda, Bloomingdale’s, Disney, Nike, etc., are accepting Bitcoin payments in 2024.
Moreover, both retail and institutional investors are recognizing Bitcoin as a viable asset. Therefore, investments in Bitcoin have steadily increased over the years, helping the prices rise further.
Is Bitcoin a Good Investment?
Sentiment in the Bitcoin cryptocurrency is certainly positive, as can be seen by the price rally. Interest in Bitcoin futures has also shown a good sign, which signals that the price may continue to go up.
Furthermore, Trump’s election win has fueled the interest in Bitcoin, which is a good sign for the global market including India. If Donald Trump fulfills the crypto regulation promises he made, BTC will keep soaring to new all-time highs.
In India, many investors lost interest in the crypto market when the Cryptocurrency Bill was introduced in Lok Sabha in 2021 and later when crypto taxation was introduced in 2022.
During the Union Budget 2022, the government of India digitally categorized digital assets, which included cryptocurrency, too. The government introduced a flat 30% gains tax on cryptocurrency and other digital assets. Also, the bill said that you cannot add any additional deduction except for the acquisition cost while filing income tax.
This was not in favor of investors, which caused the interest to plummet down. However, as Bitcoin reaches new heights, Indian investors are all into investing in this cryptocurrency for the long haul.
Will Bitcoin Reach a New All-Time High of $100k?
Bitcoin can certainly reach $100K if it continues at the current pace. While the Indian stock market indices like Nifty 50 and Sensex are falling, this cryptocurrency is trading at record levels of around $90,000. During this time, many enthusiasts are wondering if Bitcoin will reach $100K in 2024 or early 2025.
According to the current sentiments and looking at the global markets, it seems like Bitcoin can possibly reach $100,000 in 2024 itself. The US trade company Kalshi created a prediction contract among its users to determine their outlook on the market.
Data shows that 45% of the users think that Bitcoin will go beyond $100K before December. A staggering 73% believe that it will do so before January 2025.
Talking technically, the sentiments are positive among investors, which is a good sign. Moreover, if Donald Trump acts on his promisese before the year end, Bitcoin is very likely to reach a new all-time high above $100K.
Concluding Thoughts
Bitcoin usually moves in an uptrend during major events like the US presidential elections and halving. It is due to these and the other reasons mentioned in this article that Bitcoin reached a new all-time high on 13th November 2024. One more bounce and the cryptocurrency will be zeroing in on the $100,000 mark.
