I. Preface
At the end of 2024, the price of BTC broke through $100,000 for the first time, which is not only an important milestone in the history of cryptocurrencies, but also a microcosm of global economic and policy changes. The rise of BTC marks the gradual transition of a new asset class from the periphery to the mainstream, becoming the focus of global investors. This article will comprehensively analyze the driving forces behind BTC's breakthrough of $100,000, including macroeconomic conditions, technological innovation, institutional participation, and policy support, especially the profound impact of the U.S. government's crypto-friendly policies on this process. Meanwhile, this article also explores the potential of BTC as a global strategic reserve asset and the possible risks and challenges.
II. Background and Current Situation
2.1 BTC's Historic Breakthrough: Milestone and Symbolic Significance
The birth of BTC has changed human's perception of currency and assets. From the release of the BTC whitepaper by Satoshi Nakamoto in 2009 to the price of BTC breaking through $100,000 in 2024, this decentralized asset has leapt from an experimental product to a mainstream financial asset.
The breakthrough of BTC's price to $100,000 is the result of the joint action of various factors, including changes in the macroeconomic environment, the influx of institutional investors, the progress of blockchain technology, and the continuous strengthening of policy support. Especially the crypto-friendly policies introduced by the U.S. government have provided strong policy endorsement for the rise of BTC. Furthermore, this price breakthrough of BTC is not an isolated event in the financial market, but is closely related to geopolitics, global economic competition, and technological innovation trends. Against this background, the role of BTC has gone beyond an investment tool and has become part of financial reform and national strategy.
At the end of 2024, the price of BTC stood at the $100,000 mark. This price level is seen as a psychological and technical "ceiling" that has previously formed strong resistance in the market. Breaking through $100,000 not only represents an increase in investor confidence, but also symbolizes that BTC has gradually transitioned from a speculative asset to a strategic asset. The growth of its price is underpinned by profound macroeconomic and market logic. The rapid rise in the price of BTC from the end of 2023 to the beginning of 2024 benefited from multi-faceted support: first, the increase in global economic uncertainty has led to a rise in demand for safe-haven assets; second, the large-scale entry of institutional investors has formed a structural push to the market; finally, the relaxation of crypto policies by major economies like the U.S. has injected confidence into the market. All of this has transformed BTC from a technological innovation project into an important component of the global financial system.
2.2 The U.S.'s Shift in Crypto Policy: New Landscape and New Opportunities
The U.S. has gradually adjusted its regulatory attitude towards cryptocurrencies in recent years, shifting from early uncertainty and contradictory attitudes to a more open and friendly stance. In 2024, the U.S. government issued the "Digital Asset Framework Act", clarifying the legal status of cryptocurrencies and providing clear guidance on their trading, holding, and taxation. At the same time, the Federal Reserve and the Treasury Department have also actively promoted the inclusion of digital assets represented by BTC into the discussion of strategic reserve assets. This transformation not only consolidates the U.S.'s leadership position in the global digital economy, but also lays a policy foundation for the continued rise of BTC's price.
III. Core Driving Forces Behind BTC's Breakthrough of $100,000
The rise in BTC's price is the result of the joint action of multiple factors. From macroeconomic conditions to market behavior, from technological innovation to policy support, the following is an analysis of the core driving forces behind BTC's march towards $100,000:
3.1 Macroeconomic Environment: The Interweaving of Uncertainty and Hedging Demand
3.1.1 Inflationary Pressure and Dollar Depreciation
Since the COVID-19 pandemic in 2020, central banks around the world have implemented large-scale quantitative easing policies, resulting in a sharp increase in money supply. This policy has led to a global surge in inflation, especially a significant decline in the real purchasing power of the U.S. dollar. In this environment, BTC, with its fixed supply characteristics, is seen as an effective inflation-hedging tool. Institutional investors such as Bridgewater Associates view BTC as "digital gold" and believe it can provide stable value preservation during high inflation periods. According to data from the International Monetary Fund (IMF), the global average inflation rate reached 5.8% in 2023, the highest level in nearly a decade. Against this backdrop, BTC is seen as a new "digital gold" due to its constant supply and anti-inflation properties.
3.1.2 Geopolitical Uncertainty
The instability of the geopolitical situation has also driven the rise in BTC's price. From the Russia-Ukraine conflict to the China-U.S. trade war, global investors are seeking decentralized, state-policy-immune safe-haven assets. BTC precisely meets this demand. Especially in some geopolitically sensitive regions, investors and businesses are increasingly choosing BTC as a tool for cross-border capital transfer and value preservation.
3.1.3 The Challenge to the Dollar's Hegemony
Although the U.S. dollar remains the world's major reserve currency, its long-term depreciation trend has led central banks and sovereign wealth funds to explore alternative reserve assets. BTC, with its decentralized and censorship-resistant characteristics, has been included in the foreign exchange reserve strategies of some countries, such as El Salvador and some Middle Eastern countries. The status of the U.S. dollar as the global reserve currency has been challenged in recent years. On the one hand, emerging market countries like China and Russia are actively promoting de-dollarization; on the other hand, BTC provides these countries with an alternative reserve and payment tool to the U.S. dollar. For example, after El Salvador listed BTC as legal tender, other countries are also observing the feasibility of this model.
3.2 Technological Progress and the Expansion of the Application Ecosystem
3.2.1 Efficiency Improvements Brought by Technological Upgrades
The BTC network has undergone multiple technical upgrades in recent years, such as the Taproot upgrade and the widespread adoption of the Lightning Network. Taproot has improved the privacy and smart contract functionality of BTC, while the Lightning Network has made small-scale payments more efficient. These technological advancements have enhanced BTC's use cases, allowing it to go beyond just a store of value and become an actual payment tool.
3.2.2 The Fusion of Web3 and DeFi Ecosystems
With the rapid development of Web3 and DeFi (Decentralized Finance), the use cases of BTC are expanding in a more diverse direction. For example, in DeFi protocols, BTC is widely used as a collateral asset, and it has also become an important asset bridge in the cross-chain ecosystem. This diversified application has further increased the demand for BTC.
3.3 The Push from Institutional Investors
3.3.1 ETFs and the Influx of Institutional Capital
The U.S. has approved spot BTC ETFs, providing a convenient investment channel for institutions and retail investors. Asset management companies like Blackstone and Grayscale have attracted hundreds of billions of dollars in capital inflows through ETFs, providing direct support for the rise in BTC's price.
3.3.2 BTC Strategies of Large Enterprises
Companies like Tesla and MicroStrategy not only have BTC on their balance sheets, but also publicly support BTC as a strategic asset. Such actions have further enhanced the market acceptance and credibility of BTC.
3.4 The Transformation of U.S. Crypto Policies
The adjustment of U.S. crypto policies can be said to be the "catalyst" for BTC's price breakthrough of $100,000. The friendliness of the policies has reduced investors' policy risks and provided a more stable regulatory environment for crypto exchanges and institutional participants.
IV. U.S. Crypto-Friendly Policies: Profound Impact on BTC
In 2024, the U.S. enacted a series of crypto-friendly policies, covering tax incentives, legal guarantees, and infrastructure building. These policies not only accelerated the mainstream adoption of BTC, but also consolidated the U.S.'s leadership position in the global digital economy.
4.1 Tax Policy and Investment Incentives
The United States has introduced a tax reduction policy for long-term holders of BTC. According to the new policy, BTC gains held for more than 3 years will enjoy a 50% capital gains tax reduction. This encourages investors to hold BTC long-term and reduces short-term market volatility.
4.2 Infrastructure Investment and Technical Support
The US government has invested billions of dollars in developing blockchain infrastructure, including green energy mining facilities and digital asset data centers. The construction of this infrastructure has enhanced the security and sustainability of the BTC network, boosting investor confidence.
4.3 Clarification of the Regulatory Framework
Through the "Digital Asset Framework Act", the United States has clarified the legal status of BTC as a digital asset. This clarity has reduced regulatory uncertainty and paved the way for more capital to enter the market.
Five. The Potential of BTC as a Global Strategic Reserve Asset
After breaking through $100,000, BTC has gradually been seen as a viable global strategic reserve asset. This trend is driven not only by market forces, but also by profound changes in the global economic and policy environment.
5.1 BTC's Digital Gold Status
The supply of BTC is strictly limited to 21 million, giving it a scarcity similar to gold. Against the backdrop of increasing global economic uncertainty, BTC is gradually replacing gold as a new value storage tool due to its anti-inflationary properties. Since 2020, the growth rate of global central bank gold reserves has slowed, while the adoption rate of BTC has continued to rise. The Bank for International Settlements (BIS) 2024 report points out that BTC is challenging the traditional safe-haven asset market.
5.2 Adoption by Institutions and Nations
Since El Salvador made BTC legal tender, several emerging economies have been actively exploring the inclusion of BTC in their national reserves. Many countries in the Middle East and Africa, due to the poor stability of their fiat currencies, have begun to use BTC as part of their foreign exchange reserves. At the same time, the behavior of companies like MicroStrategy, which hold a high proportion of BTC on their balance sheets, has also indirectly driven national-level attention.
5.3 A New Paradigm for Global Settlement and Payment
BTC is becoming a new choice for international settlement and cross-border payments. Compared to traditional payment systems (such as SWIFT), BTC has higher efficiency and lower costs. Countries like Russia and Iran, which are restricted by sanctions, have already tried to use BTC in energy transactions. This trend indicates that BTC may become a tool to circumvent financial sanctions, thereby enhancing its position in international trade.
Six. The Multidimensional Impact of the US Crypto-Friendly Policy
The US crypto-friendly policy has not only driven the rise in the price of BTC, but has also profoundly changed the global crypto ecosystem from multiple dimensions.
6.1 Consolidating the Position of the Global Financial Center
Through a clear legal framework and policies that encourage innovation, the US has attracted a large number of blockchain companies and investors. For example, the listing of crypto exchanges like Coinbase and the regulatory support behind them have given the US a leading position in the global crypto finance market.
6.2 Promoting the Layout of Institutional Investors
The improvement of the US regulatory environment has made it possible for large institutional investors to enter the BTC market. Traditional financial giants like JPMorgan Chase and BlackRock have launched financial products related to BTC. This not only provides more liquidity for the market, but also increases the credibility of BTC as an asset class.
6.3 Promoting the Symbiosis of the US Dollar and BTC
Although BTC is seen as a tool to challenge the hegemony of the US dollar to a certain extent, the US has cleverly tied BTC to the US dollar through its crypto-friendly policy. For example, BTC ETFs priced in US dollars have become mainstream, a design that both promotes the development of the BTC market and consolidates the core position of the US dollar.
Seven. Risks and Challenges Facing BTC in the Future
Although the prospects for BTC seem bright, as a new asset class, it still faces many risks and challenges.
7.1 Market Volatility Risk
The high volatility of BTC prices makes it difficult to completely replace gold or other reserve assets. Even if it breaks through $100,000, the violent fluctuations in the market may still trigger large-scale sell-offs, leading to price collapses. The market turmoil triggered by the FTX incident in 2023 is a case in point.
7.2 Technical and Security Risks
Although the security of the BTC network has been widely recognized, there are still potential threats at the technical level. For example, the development of quantum computing technology may undermine the cryptographic security of BTC. In addition, the centralization of miners may also weaken the decentralized nature of the network.
7.3 Policy and Regulatory Pressure
While the US policy is friendly, the regulatory attitudes of other countries are not consistent. For example, China's tough ban on cryptocurrencies has led to the exodus of a large number of miners. In the future, the uncertainty of the global regulatory environment is still a major risk for the BTC market.
7.4 Environmental and Social Pressure
BTC mining consumes a large amount of energy, which has sparked widespread controversy in society. Although more and more mining farms are turning to renewable energy, the problem of low energy efficiency has not been completely solved.
Eight. Investment Strategies and Outlook
8.1 Investment Strategies for Investors
After breaking through $100,000, investors should adopt a more diversified strategy. On the one hand, long-term investors can continue to hold BTC and view it as "digital gold"; on the other hand, short-term investors need to closely monitor market fluctuations and macroeconomic factors, and adjust their investment portfolios in a timely manner.
8.2 Strategic Applications for Enterprises
For enterprises, BTC is not only a new type of reserve asset on the balance sheet, but can also be used as a means of payment and incentive mechanism. For example, using BTC for international settlement or employee incentives will become an important means for enterprises to enhance their competitiveness.
8.3 Outlook on Future Prices and Value
The long-term growth potential of BTC prices is still huge. According to forecasts by the Bloomberg Crypto Research Center, BTC prices may reach $250,000 by 2030. However, its true value lies not only in its price, but in the new financial order it is building.
Nine. Conclusion and Outlook: The Globalization of BTC and Its Future
BTC breaking through $100,000 marks a new stage in its globalization process. From a "speculative asset" to a "strategic reserve", BTC is reshaping the global financial system. The US crypto-friendly policy has provided important support for this transformation, but whether BTC can truly become a global reserve asset in the future still requires a balance between technology, regulation and the market. On the other hand, BTC breaking through $100,000 and the US crypto-friendly policy mark the entry of this digital asset into the core areas of mainstream finance and national strategy. The future of BTC will be influenced by multiple factors, including technological progress, policy support, and changes in the global economic environment. Despite the challenges, the potential of BTC as "digital gold" cannot be ignored, and its position in the global financial system will continue to rise.
As the global economy continues to undergo digital transformation, the role of BTC will become increasingly important. Whether as a hedge asset or a payment tool, BTC is gradually moving towards the center stage of mainstream finance. Investors, enterprises and policymakers need to work together to find the best balance between risks and opportunities, in order to promote the sustainable development of this digital asset.
