Bitcoin Returns to Over $100,000
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Bitcoin Returns to Over $100,000

January 8, 2025No Comments

Table of Contents

  • On Monday, Bitcoin surpassed $100,000 for the first time since December 19.
  • Since the presidential election, Bitcoin has increased by almost 50% as investors hope that the Trump administration and a pro-crypto Congress would enact laws that will help the virtual currency.
  • On Friday, spot bitcoin ETFs had robust inflows of almost $900 million, and the price movement of bitcoin suggests that Monday could again see favorable numbers.

Following weeks of instability, bitcoin prices broke through the $100,000 price mark on Monday for the first time since December 19.

 

Bitcoin rose more than 50% in the weeks after the U.S. presidential election, reaching a record high of almost $108,000 in mid-December as investors hoped the Trump administration would enact measures to boost the cryptocurrency market. During the holiday season, the rise stopped, and bitcoin dropped to about $92,000.

 

With little news to spur the recovery, the digital currency was trading at about $102,000 early Monday afternoon, up from an intraday low of about $98,000.

What Caused Bitcoin to Rise Above $100,000 Once More?

A reversal in flows for spot bitcoin exchange-traded funds (ETFs) is one potential consideration. According to data from Farside Investors, spot bitcoin ETFs saw inflows of $908.1 million on Friday after struggling with several days of sizable withdrawals. Around $1.9 billion has been pulled out of spot bitcoin ETFs since Dec. 19, a few days after bitcoin broke through the $108,000 mark.One

 

Spot bitcoin ETFs purchase bitcoin when investors invest in them, and the demand for bitcoin drives up its price. The surge in bitcoin prices early last year was driven by massive demand from spot bitcoin ETFs, and it may do so again.

 

According to Bloomberg ETF analyst Eric Balchunas on X.2 X, “I would have predicted a rough patch for the [bitcoin] ETFs given the drop below $100k (overdue for a breather), but no, they roared back with nearly $1b Friday, which lifted the 1W to positive net.”

 

Additionally noteworthy is the fact that MicroStrategy (MSTR) increased its bitcoin purchases for the ninth consecutive week, but at a lower amount of $101 million than in prior weeks. Even while MicroStrategy is regarded as a bitcoin proxy, that by itself couldn’t have caused such a significant spike in the price of bitcoin.

FAQ

Bitcoin’s recent surge above $100,000 is attributed to increased inflows into spot Bitcoin ETFs, which saw nearly $900 million in investments on Friday. This rise in demand for Bitcoin, along with a broader market sentiment shift, has pushed its price upward.

Spot Bitcoin ETFs purchase Bitcoin when investors invest in them. The recent inflow of $908.1 million into these ETFs created additional demand for Bitcoin, contributing to its price surge. Historically, strong inflows into Bitcoin ETFs have been linked to significant price movements.

After the U.S. presidential election, Bitcoin’s price increased by over 50%, as investors anticipated that a pro-crypto administration and Congress would introduce favorable laws for the cryptocurrency market. This optimism played a role in the price reaching a record high of nearly $108,000 in mid-December.

In addition to ETF inflows, MicroStrategy’s continued Bitcoin acquisitions—albeit at a smaller scale of $101 million—highlight investor confidence in the cryptocurrency. While this alone wasn’t enough to trigger the significant price increase, it added to the overall bullish sentiment.

Bitcoin’s price is known for its volatility. Factors such as market sentiment, regulatory changes, and macroeconomic conditions can influence its price. While recent trends suggest a positive outlook, investors should remain cautious and consider potential risks.

Last updated on January 8, 2025

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