Tong Deng, Jinse Finance
Since Donald Trump's election victory, the cryptocurrency market has been on a steady upward trend. As of 10:45 am Beijing time on November 12, BTC was trading at $87,699.41, up 7.6% in 24 hours. Other cryptocurrencies have also seen significant gains, with ETH trading at $3,309.23, up 3.3% in 24 hours; Solana at $217.20, up 3.2% in 24 hours; and Dogecoin at $0.3529, up 20% in 24 hours.
What are the driving factors behind the current cryptocurrency market? How long will it take for BTC to reach the $100,000 milestone?
I. What are the driving factors behind the cryptocurrency market?
1. Trump's election victory
Seemingly having tasted the sweetness of cryptocurrencies and Non-Fungible Tokens (NFTs), Trump's stance on cryptocurrencies has shifted from "rejection" during his first term to "support" prior to this election. As early as July this year at the 2024 Bitcoin Conference in Nashville, Trump made a series of remarkable statements:
He will ensure that the United States becomes the global capital of cryptocurrencies and the world's Bitcoin superpower; On his first day in office, he will fire the current chairman of the U.S. Securities and Exchange Commission, Gary Gensler. During his tenure as President of the United States, he will never introduce a CBDC; He promises to maintain a "national strategic Bitcoin reserve" and "never sell" the Bitcoin seized by the government; He hopes that Bitcoin will be mined, minted, and manufactured in the United States...
For details, please refer to the Jinse Finance article "Review of Trump's Bitcoin Conference Speech: Ensuring the U.S. Becomes a Bitcoin Superpower"
According to The Washington Post, after his election victory, President Trump is preparing for the U.S. government to take a more lenient stance on cryptocurrencies. He is looking for key position candidates who are friendly to the cryptocurrency industry, and his senior advisors are seeking input from cryptocurrency executives on potential changes to federal policy. The initial discussions have focused on a range of financial regulatory agencies, including the U.S. Securities and Exchange Commission. According to five people familiar with the matter, Trump's advisors are considering appointing current regulators, former federal officials, and financial industry executives to important leadership positions, many of whom have publicly expressed support for cryptocurrencies. They warned that the discussion process is still in the early stages, and the list of candidates is still changing. Trump will appoint cryptocurrency-friendly cabinet members to fulfill his promise of making the United States the "global capital of cryptocurrencies".
In a report on Monday, TD Cowen's researchers wrote that bipartisan cryptocurrency legislation covering stablecoins and market structure is more likely to be passed during Trump's second term.
Paxos co-founder and CEO Charles Cascarilla also pointed out that "Trump's election creates a real opportunity for a golden age of cryptocurrencies, as people believe all the pent-up demand could be unleashed and turn the U.S. from a laggard in the crypto industry to a leader".
Furthermore, Trump's actions not only pushed BTC to new highs, but also led to impressive gains in other cryptocurrencies. Bloomberg noted that due to enthusiasm for the cryptocurrency industry's prospects under the incoming President Trump, there has been a wave of speculative bets. This includes Doge, which has risen about 50% in the past five days; the standout performer is ADA from the Cardano blockchain, which has surged over 60% in the same period, possibly driven by network founder Charles Hoskinson discussing plans to collaborate with Washington lawmakers on a podcast. Additionally, tokens related to Polygon, Cosmos, Solana, and Algorand have all outperformed Bitcoin's roughly 7% five-day gain, reaching new all-time highs. BTC Markets Pty CEO Caroline Bowler said, "A rising tide lifts all boats, with Bitcoin's boom quickly spilling over into altcoins; the entire industry is expected to be a net beneficiary of the Trump administration."
2. USDT issuance
According to Whale Alert, Tether Treasury minted around 200 million USDT on the Ethereum network around 1:07 am Beijing time on November 12. Tether CEO Paolo Ardoino commented that this was an authorized but unissued transaction, meaning it will be used as inventory for the next issuance request and on-chain swaps.
Previously, from November 8-10, Tether had issued a total of 4 billion USDT.
Since USDT is pegged to the U.S. dollar, the issuance of each USDT is backed by $1, and the more USDT issued, the more off-chain capital is entering the market, which is clearly beneficial for the cryptocurrency market. On the other hand, Tether's actions also reflect the investment demand of investors, and with the dual factors of off-chain capital inflow and investor enthusiasm, the prosperity of the cryptocurrency market is not surprising.
3. Institutional adoption
Recently, several major institutions have shown optimism towards cryptocurrencies and taken concrete actions.
On November 11, MicroStrategy founder hinted at potentially continuing to increase their BTC holdings. Subsequently, market reports indicated that MicroStrategy had acquired 27,200 BTC for approximately $203 million, at an average price of around $74,463 per BTC, achieving a quarterly BTC gain of 7.3% and a year-to-date BTC gain of 26.4%. As of November 10, 2024, MicroStrategy holds 279,420 BTC at an average price of $42,692 per BTC, for a total purchase price of approximately $119 million.
Nano Labs, a cryptocurrency mining chip design company, recently announced that it will accept BTC as payment for its goods and services through a Coinbase business account, leading to a slight increase in its stock price. Nano Labs stated that as "cryptocurrency adoption continues to grow, especially among enterprises seeking efficient and secure cross-border transactions," it is "taking a proactive stance in the evolving digital economy." According to Nano Labs, adopting BTC will provide "greater payment flexibility," but it did not provide any details on whether it plans to hold the cryptocurrency on its balance sheet.
Since Musk has always been a cryptocurrency enthusiast, Tesla holds a significant amount of BTC. According to data disclosed on the X platform by Arkham, the value of Tesla's BTC holdings has reached $1 billion.
Asset management firm Bernstein has also urged investors to "increase their exposure to Bitcoin and cryptocurrencies as soon as possible".
Furthermore, according to The Bitcoin Office in El Salvador, the country is still executing its "plan to buy 1 BTC per day." Coincidentally, according to Arkham's monitoring, the Bhutanese government's 12,568 BTC holdings have surpassed $1 billion in value.
4. Crypto-related stocks soar
According to a report by Jinse Finance on November 12, the three major U.S. stock indexes collectively closed higher, with the Dow Jones Industrial Average rising 0.69%, the S&P 500 index up 0.1%, and the Nasdaq up 0.06%, all reaching new all-time highs. Tesla rose about 9%, surpassing TSMC to become the seventh-largest stock in the U.S. market. Cryptocurrency-related stocks saw significant gains, with Canaan (CAN.O) up 41%, MicroStrategy (MSTR.O) up 25%, Coinbase (COIN.O) up 19%, and Trump Media & Technology Group (DJT.O) up 4.7%.
When the U.S. stock market performs well, investors' risk appetite tends to increase, making them more willing to invest in the higher-risk cryptocurrency market. The rise of crypto-related stocks also further boosts investors' confidence in entering the cryptocurrency market.
5. Investor enthusiasm
Market observers note that after Trump's election victory, the search volume for Bitcoin on Google surged, and with Bitcoin prices reaching new highs, the interest of retail investors has been reignited, and there is a wave of new buyers ready to enter the cryptocurrency market. Solv Protocol co-founder Ryan Chow said that Trump's election victory is the "primary catalyst to kick off the next bull market." Crypto macro analyst Noelle Acheson stated, "In general, retail investors tend to be latecomers, as they are influenced by headlines related to prices and widespread social attention. With the absence of retail investors, market observers can infer that the crypto cycle is in the early stages, and we will know we are approaching the peak of the hype when the retail crowd starts to flood in."
II. Is BTC still far from the $100,000 mark?
1. The $100,000 target is very reasonable
Jag Kooner, the derivatives manager at the cryptocurrency exchange Bitfinex, said that while it is difficult to predict the price of Bitcoin, the target of reaching $100,000 in a few months "does not seem too far-fetched." He added: "Given the bullish momentum, coupled with the fact that the economy has avoided a recession, we expect the downside for Bitcoin to be limited now. This (the $100,000 target) seems very reasonable."
James Butterfill, the head of research at CoinShares, also stated that Bitcoin reaching $100,000 - which would mean a 33% upside - "is now possible" as Trump's victory and the Republican's control of the Senate may make it easier to push for a "more permissive regulatory framework," and $100,000 Bitcoin "does not sound that unreasonable" given that it would represent only "about 10% of the gold market capitalization." He believes the main catalysts for Bitcoin's future are changes in SEC leadership, crypto-friendly regulations, and further adoption by large companies. He added that another catalyst could be interest rate cuts by the Federal Reserve.
Fadi Aboualfa, the head of research at Copper.co, said that Bitcoin's price is likely to reach $100,000 by January 20, 2025, when Trump's presidential term ends. After the news of Trump's election victory broke, Aboualfa wrote in a comment to CNBC: "For Bitcoin, it's worth remembering that Trump witnessed two historic high cycles during his 2016-2020 presidency. While these rallies occurred against a backdrop of a weakening dollar, the current environment is one of a strengthening dollar. However, given that Bitcoin spot ETFs currently hold around 1.1 million Bitcoins, the momentum in the coming months is likely to remain positive."
CNBC reported that Bitcoin's price could reach $100,000 before the presidential inauguration.
2. Bullish outlook for the future
Geoff Kendrick of Standard Chartered Bank predicted that Bitcoin will continue to rise until the end of this year, "easily reaching" $100,000 before some Bitcoin options expire on December 27. "I forecast the Bitcoin price will reach $125,000 by the end of the year, which is the next level, although I note that many Trump-related trades peaked around the January 20 inauguration after the 2016 election... So if Bitcoin doesn't reach $125,000 by December 31, I think it will by January 20."
Kendrick further predicted that given the recent gains of Ethereum and Solana, the rise in Bitcoin prices is likely to "benefit all investors," with some tokens outperforming Bitcoin. Kendrick wrote: "It seems inevitable that SOL will set a new all-time high (the current record is $260 set in November 2021) by the end of this year. ETH reaching a new all-time high (the current record is $4,866 set in November 2021) is likely to happen around the time of the inauguration, and overall we believe these assets will continue to rise, with SOL potentially performing the best."
After the U.S. election, Bernstein analysts issued a bullish report, encouraging investors to quickly increase their exposure to the crypto industry. Gautam Chhugani, the head of research at Bernstein, said that the expected pro-crypto policies of the Trump administration, or the appointment of a new SEC chair, could create a more favorable regulatory environment for the industry. The report recommends that investors focus on spot Bitcoin and Ethereum ETFs, publicly listed Bitcoin mining companies, companies holding Bitcoin, and crypto trading platforms (such as Robinhood and Coinbase). Furthermore, Bernstein forecasts that Bitcoin could reach $200,000 by the end of 2025 and suggests that investors buy BTC, ETH, SOL, and other major digital assets.
Sam Altman, the CEO of OpenAI, posted on the X platform: "Over the past year, Worldcoin has made amazing progress, and I'm incredibly proud of the team, especially alexblania's leadership! A rare combination of vision and execution. Overall, I'm very optimistic about the bright future of cryptocurrencies!"
III. Conclusion
Since the birth of Bitcoin 16 years ago, its market has experienced ups and downs, and after weathering many "death" predictions, its performance has become increasingly impressive. Currently, Bitcoin has surpassed silver to become the 8th largest asset globally by market capitalization. "What doesn't kill me only makes me stronger," Bitcoin is about to break through the $90,000 mark, so is the $100,000 target still far away?
