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Cryptocurrency

Bitcoin Hits $100,000 as Trump Shows Crypto Support

2024-12-05

Bitcoin, the world's most prominent cryptocurrency, achieved a significant milestone on Thursday as its price soared above $100,000 for the first time. This event came amid expectations of a more crypto-friendly regulatory environment under Donald Trump's presidency next year. The excitement surrounding a pro-crypto administration has been driving Bitcoin's value to new heights, and it has more than doubled this year and surged over 45% since the November 5 U.S. presidential election.

Unlock the Potential of Bitcoin with Trump's Promise

Bitcoin: A Digital Revolution

Bitcoin, a 16-year-old digital currency, has been making waves in the financial world. It operates independently of banks, allowing for direct peer-to-peer transactions. This unique feature has attracted investors from around the globe, as it offers an alternative to traditional banking systems. The cryptocurrency market has seen significant growth in recent years, and Bitcoin has emerged as the leader, with its value constantly on the rise.

Since its inception, Bitcoin has faced numerous challenges and regulatory uncertainties. However, with the potential support of a crypto-friendly administration, it has the opportunity to reach even greater heights. The recent surge in Bitcoin's price is a testament to the growing interest and confidence in the cryptocurrency market.

Trump's Impact on Bitcoin

Donald Trump's announcement of nominating Paul Atkins as the chair of the Securities and Exchange Commission has played a crucial role in Bitcoin's ascent. Atkins, a pro-business former federal regulator with ties to the cryptocurrency industry, is expected to bring market deregulation and a more favorable regulatory environment for cryptocurrencies.

Trump's promise to create a crypto-friendly administration and overhaul U.S. policy has fueled the excitement among Bitcoin investors. His stated commitment to support cryptocurrencies has led traders to bet on a less restrictive regulatory environment, which has lifted the overall sector. The president-elect's celebration of Bitcoin reaching the $100,000 milestone further solidified its position as a major player in the financial world.

The Future of Bitcoin

The cryptocurrency industry is pushing for executive orders that will guarantee crypto companies' access to banking services and end enforcement actions. These changes could have a significant impact on the future of Bitcoin and the cryptocurrency market as a whole.

As Bitcoin continues to gain popularity and acceptance, it is likely to play an increasingly important role in the global financial system. However, it also faces challenges such as regulatory uncertainty and security concerns. Despite these challenges, Bitcoin remains a highly attractive investment option for many investors due to its potential for high returns.

New York (AP) witnessed a remarkable event as Bitcoin reached a new milestone by topping $100,000 for the first time. This massive rally in the world's most popular cryptocurrency was largely driven by the election of Donald Trump and has continued to gain momentum.

Unraveling the Bitcoin Phenomenon and Its Implications

Back up. What is Cryptocurrency Again?

Cryptocurrency has been in existence for some time. In recent years, it has gained significant attention. In simple terms, it is digital money that operates through an online network without a central authority. Transactions are recorded using blockchain technology. Bitcoin is the largest and oldest cryptocurrency, but other assets like Ethereum, Tether, and Dogecoin have also become popular. While some investors view it as a digital alternative to traditional money, the majority of daily financial transactions still use fiat currencies. Bitcoin's price is highly volatile and depends on larger market conditions.

For example, just two years ago, Bitcoin dropped below $17,000 after the collapse of crypto exchange FTX. This shows the inherent instability of the cryptocurrency market.

Why is Bitcoin Soaring?

A significant portion of the recent surge is related to the outcome of the U.S. presidential election. Trump, who was initially a crypto skeptic, has now pledged to make the U.S. the "crypto capital of the planet" and create a "strategic reserve" of Bitcoin. His campaign accepted cryptocurrency donations and he actively engaged with the crypto community.

On Thursday morning, shortly after Bitcoin surpassed the $100,000 mark, Trump congratulated "BITCOINERS" on his social media platform. This move further fueled the rally, and some industry players believe he took credit for it.

The Risks Involved

History has shown that one can lose money in crypto just as quickly as they can make it. The long-term price behavior of Bitcoin is highly dependent on larger market conditions. Trading occurs 24/7.

During the COVID-19 pandemic, Bitcoin started at just over $5,000 and climbed to nearly $69,000 by November 2021 due to high demand for technology assets. However, it later crashed during a series of aggressive rate hikes by the Federal Reserve. The collapse of FTX in late 2022 also significantly undermined confidence in the crypto market.

Experts stress caution, especially for small-pocketed investors. Even with the coming Trump administration potentially bringing lighter regulation, there are still uncertainties. As Adam Morgan McCarthy, a research analyst at Kaiko, said, "Keep it simple. And don't take on more risk than you can afford to." There is no guaranteed way to predict the future of Bitcoin.

The Climate Impact

Assets like Bitcoin are produced through a process called "mining," which consumes a large amount of energy. Operations relying on pollutive sources have raised concerns over the years.

Recent research by the United Nations University and Earth's Future journal found that the carbon footprint of 2020-2021 Bitcoin mining across 76 nations was equivalent to the emissions from burning 84 billion pounds of coal or running 190 natural gas-fired power plants. The energy source used plays a crucial role in the environmental impact.

However, industry analysts have noted that the use of clean energy has increased in recent years, coinciding with the growing calls for climate protection.

On Thursday, U.S. stocks find themselves on the cusp of a potentially weak opening. This comes after an impressive close at record highs on Wednesday. The futures of all three major indices show a marginal decline, indicating a sense of caution on Wall Street. The tentativeness in these futures is a direct response to Federal Reserve chair Jerome Powell's efforts to downplay expectations of swift rate cuts. Powell cited a strong economy and uncertainty about inflation as key factors. He stated, "The labor market is better, and the downside risks appear to be less in the labor market. Growth is definitely stronger than we thought, and inflation is coming [out] a little higher." This cautious stance has led to a reevaluation of market expectations.

Unraveling the Dynamics of U.S. Stocks on Thursday

Performance of Major Indices

In the premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY fell 0.03% to $607.46, and the Invesco QQQ ETF QQQ declined 0.10% to $522.72. Looking at the individual indices, the Nasdaq 100 was down 0.10%, the S&P 500 by 0.02%, and the Dow Jones by 0.01%. The R2K showed a slight increase of 0.06%. These fluctuations in premarket trading give a glimpse into the early market sentiment.The previous session ended on a positive note, with all three major indices registering healthy gains. The Dow Jones settled above 45,000 for the first time, while the S&P 500 and Nasdaq solidified their positions. Crude oil prices also edged up ahead of the OPEC+ decision on production. Treasury yields rose after jobs data revealed that private payrolls came in lower than expected. In terms of economic data, U.S. private businesses added 146K workers to their payrolls in November, compared to a revised 184K gain in October and market estimates of 150K. U.S. factory orders rose by 0.2% from the previous month to $586.7 billion in October. However, the ISM services PMI fell to 52.1 in November from 56 in October and below market estimates of 55.5. Most sectors on the S&P 500 closed in the red, with energy, materials, and financial stocks taking the biggest hits. But consumer discretionary and information technology stocks defied the trend and closed higher.

Analysts' Insights

Analysts at BlackRock Investment Institute are optimistic about American companies' growth in the coming year. Wei Li, the chief investment strategist at BlackRock Investment Institute, said during a media roundtable on Wednesday, "Currently, across all the scenarios in the outlook, the platform is gravitating towards the US corporate strength scenario, which is another way of calling for US exceptionalism." This bullish outlook is shared by Wells Fargo strategists, who expect a bull run in 2025 and target an S&P 500 level of 7,007. Christopher Harvey and his team at Wells Fargo believe, "On balance, we expect the Trump Administration to usher in a macro environment that is increasingly favorable for stocks at a time when the Fed will be slowly reducing rates."Ryan Detrick, the chief market strategist at Carson Group, also explained why bears should not bet against equities in December. He pointed out that when the S&P 500 was up 20% or more for the year heading into the final month, December has been up nine of the past 10 times. His analysis shows that big gains in November set equities on a path for a rally in the new year. "Do big monthly gains matter? We'd say yes, as the S&P 500 is up an average of 13.5% a year later and higher nearly 84% of the time after a calendar month gain of more than 5%."

Stocks in Focus

MicroStrategy Inc. MSTR stock surged over 8% in premarket trading on Thursday after Bitcoin BTC/USD hit the long-awaited $100,000 mark for the first time in history late on Wednesday. Coinbase Global Inc. COIN also surged over 3%. However, SentinelOne Inc. S stock plunged 15% in premarket trading after the company missed earnings expectations. Synopsys Inc. SNPS stock fell over 7% after the software provider's guidance missed estimates. Five Below Inc. FIVE stock surged over 13% in premarket after the company raised guidance following strong Black Friday sales and a new CEO announcement. Investors are eagerly awaiting earnings results from Dollar General Corporation DG, Kroger Co. KR, and Lululemon Athletica Inc. LULU today.

Commodities, Bonds, and Global Equity Markets

Crude oil futures surged in the early New York session, gaining 0.50% to hover around $68.88 per barrel. The 10-year Treasury note yield edged up to 4.207%. Major Asian markets ended mixed on Thursday, while European markets were in the green in early trading.Thursday's economic calendar includes the release of initial jobless claims data for November and U.S. trade deficit data for October, which will be released at 8:30 a.m. ET. This data is expected to provide further insights into the economic landscape and potentially impact market movements.In conclusion, Thursday's U.S. stock market presents a complex picture of cautious sentiment, market movements, and various factors at play. Analysts' expectations and economic data will continue to shape the market's trajectory in the coming days.