Bitcoin hits $100,000: what next for the booming cryptocurrency?

Bitcoin's value has surged past the eagerly awaited mark of $100,000, sparking discussions about how much further it might rise and whether it can overcome its well-known price fluctuations.

The biggest cryptocurrency in the world climbed to about $103,400 shortly after 04:00 GMT on Thursday, before experiencing a small decline.

Dan Coatsworth, an investment analyst at AJ Bell, referred to it as a "pivotal moment" for cryptocurrency and noted that it had a "direct connection" to Donald Trump's win in the election.

Trump turned to social media to mark the occasion, sharing a message that said, "Congratulations to Bitcoin enthusiasts" and added, "You're welcome!"

The president-elect had earlier promised to turn the US into the leading hub for cryptocurrency and a dominant force in Bitcoin globally, which contributed to the rise in Bitcoin's value following his election.

It surpassed the $100,000 mark after Trump announced his intention to select former SEC commissioner Paul Atkins to lead the Wall Street regulatory body.

Mr. Atkins is regarded as being much more supportive of cryptocurrency compared to the current leader, Gary Gensler.

"There's a strong expectation that the new government will be more supportive of cryptocurrency compared to the previous one," stated Andrew O'Neill, a digital assets specialist at S&P Global.

"In terms of Bitcoin's price, I believe that has been a key factor behind the current trend, and it's expected to carry on into the upcoming year," he mentioned.

Yet, Bitcoin has experienced both significant declines and quick recoveries in the past, and certain analysts warn that this pattern is not expected to change anytime soon.

"Many individuals have made significant profits from the rise in cryptocurrency values this year; however, Mr. Coatsworth cautions that this high-risk investment isn’t the right choice for everyone."

"It's unstable, uncertain, and fueled by guesswork, all of which means it's not the kind of investment that allows you to sleep soundly at night."

In the run-up to the US presidential election, Trump aimed to win over cryptocurrency investors by vowing to remove Gary Gensler, the head of the Securities and Exchange Commission (SEC), right from the start of his presidency.

Mr. Gensler's stance on the cryptocurrency industry has been noticeably more critical than that of Trump.

In September, he shared with the BBC that the industry is filled with scams, con artists, and fraudsters.

During his tenure, the SEC took unprecedented action by initiating 46 enforcement cases related to cryptocurrency against various companies in 2023.

Mr. Gensler announced in November that he would resign on January 20, which coincides with Trump's inauguration day.

Crypto supporters have responded positively to the selection of Paul Atkins as his successor to lead the SEC.

Mike Novogratz, the founder and CEO of the US cryptocurrency company Galaxy Digital, expressed his belief that a more defined regulatory framework would speed up the integration of digital currencies into conventional finance.

In 2024, Bitcoin has experienced less severe drop-offs in its value compared to earlier years.

In 2022, the price dropped dramatically, sinking below $16,000 after the FTX cryptocurrency exchange went bankrupt.

Several significant events, apart from Trump's election win, have contributed to increasing investor confidence that its worth will continue to rise.

The SEC has greenlighted multiple spot Bitcoin exchange-traded funds (ETFs), enabling major investment companies such as Blackrock, Fidelity, and Grayscale to offer products tied to Bitcoin's price.

Several of these items have experienced inflows of cash amounting to billions of dollars.

However, the risk of its value dropping sharply highlights that it differs from traditional currencies. Investors must be aware that they have no safety measures or options for recovering losses on their Bitcoin investments.

Carol Alexander, a finance professor at Sussex University, mentioned to BBC News that the anxiety of missing out (FOMO) among younger individuals will likely contribute to a further increase in Bitcoin's price.

However, she pointed out that although this might lead to an increase in the prices of other cryptocurrencies, a lot of the younger investors who are putting their money into meme coins are actually experiencing losses.

Kathleen Breitman, who co-founded the cryptocurrency Tezos, shared some advice for anyone thinking about investing in Bitcoin.

"These markets often follow trends, so it's crucial to exercise great care when dealing with them," she explained to the BBC.