Bitcoin soared above $100,000 for the first time on Thursday, marking a widely anticipated milestone that is hailed even by skeptics amid coming-of-age for cryptocurrencies – as investors bet on a friendly U.S. administration to cement cryptos' place in financial markets.
The total value of the cryptocurrency market has almost doubled over the year so far to hit a record just shy of $3.8 trillion, according to data provider CoinGecko. By comparison, Apple alone is worth about $3.7 trillion.
Bitcoin's march from the libertarian fringe to Wall Street has minted millionaires, a new asset class, and popularized the concept of "decentralized finance" in a volatile and often controversial period since its creation 16 years ago.
Bitcoin has more than doubled in value this year and is up more than 50% in the four weeks since Donald Trump's sweeping election victory, which also saw a slew of pro-crypto lawmakers being elected to Congress.
Once it broke $100,000 in Thursday's Asian morning, it was soon above $103,000 on its way to an all-time high of $103,619, a surge of about 6% on the day. It was last fetching $101,933.
"We're witnessing a paradigm shift," said Mike Novogratz, founder and CEO of U.S. crypto firm Galaxy Digital.
"Bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream – this momentum is fuelled by institutional adoption, advancements in tokenization and payments, and a clearer regulatory path."
Trump embraced digital assets during his campaign, promising to make the United States the "crypto capital of the planet" and to accumulate a national stockpile of bitcoin.
"We were trading basically sideways for about seven months, then immediately after Nov. 5, U.S. investors resumed buying hand-over-fist," said Joe McCann, CEO and founder of Asymmetric, a Miami digital assets hedge fund.
On Wednesday, Trump said he would nominate Paul Atkins to run the Securities and Exchange Commission (SEC).
Atkins, a former SEC commissioner, has been involved in crypto policy as co-chair of the Token Alliance, which works to "develop best practices for digital asset issuances and trading platforms," and the Chamber of Digital Commerce.
"Atkins will offer a new perspective, anchored by a deep understanding of the digital asset ecosystem," said Blockchain Association CEO Kristin Smith.
"We look forward to working with him ... and ushering in – together – a new wave of American crypto innovation."
A slew of crypto companies, including Ripple, Kraken and Circle, are also jostling for a seat on Trump's promised crypto advisory council.
Bitcoin has proven to be a survivor of precipitous downturns.
Its move into six-figure territory is a remarkable comeback from a dip below $16,000 in 2022 when the industry was reeling from the collapse of the FTX exchange. Founder Sam Bankman-Fried was subsequently jailed.
Analysts say the growing embrace of Bitcoin by big investors this year has been a driving force behind the record-breaking rally.
U.S.-listed bitcoin exchange-traded funds (ETFs) were approved in January and have been a conduit for large-scale buying, with more than $4 billion streaming into these funds since the election.
"Roughly 3% of the total supply of bitcoins that will ever exist have been purchased in 2024 by institutional money," said Geoff Kendrick, global head of digital assets research at Standard Chartered.
"Digital assets, as an asset class, is becoming normalized," he said. "If you fast forward a number of years on trading floors, you'll have a sales and trading desk ... which will sit alongside FX and rates and commodities."
It is already becoming increasingly financialised, with the launch of bitcoin futures in 2017 and a strong debut for options on BlackRock's ETF in November.
Crypto-related stocks have soared along with the bitcoin price, with shares in bitcoin miner MARA Holdings and exchange operator Coinbase each up around 65% in November.
Software firm Microstrategy, which has repeatedly raised funds to buy Bitcoin and held an aggregate of about 402,100 bitcoins as of Dec. 1, has gained 542% this year.
Trump himself unveiled a new crypto business, World Liberty Financial, in September, although details have been scarce. The billionaire Elon Musk, a major Trump ally, is also a proponent of cryptocurrencies.
The cryptocurrency industry has been criticized for its massive energy usage, while crypto crime remains a concern, and the underlying technology is yet to deliver a major revolution in how money moves around the globe.
Still, as Russian President Vladimir Putin pointed out at an investment conference on Wednesday: "Who can prohibit it? No one." And its longevity is perhaps a testament to a degree of resilience.
"As time goes by, it's proving itself as part of the financial landscape," said Shane Oliver, chief economist and head of investment strategy at AMP in Sydney.
"I find it very hard to value it ... it's anyone's guess. But it does have a momentum aspect to it, and at the moment, the momentum is up."
