Bitcoin has achieved a remarkable milestone, soaring to an all-time high of $106,533 during intraday trading on December 16, 2024. This surge represents a staggering 150% increase since the start of the year, following a period of price consolidation after crossing the $100,000 mark earlier this month. Analysts are optimistic about Bitcoin’s future trajectory, anticipating further increases in the coming weeks.
Petr Kozyakov, CEO of crypto wallet provider Mercuryo, expressed that Bitcoin is now in “uncharted waters,” reflecting a resurgence of investor enthusiasm as we approach the end of the year. Mena Theodoru, co-founder of crypto exchange Coinstash, noted that the market appears to have established a psychological support level at $100,000, indicating growing investor confidence in Bitcoin’s stability.
As 2024 draws to a close, market observers are betting on continued price appreciation for Bitcoin. Shannon Kurtas, head of trading at crypto exchange Kraken, emphasized that Bitcoin’s recent rise is driven by sustained high demand and several significant news catalysts. There are a number of key factors that have contributed to this recent surge.
There has been a notable decrease in Bitcoin availability observed, due to massive withdrawals from crypto exchanges. According to a report from 10x Research, significant outflows from major trading platforms have led to reduced liquidity in the market. Data from Coinglass indicates that over 180,000 Bitcoin have been withdrawn from centralized exchanges since Donald Trump’s election victory last month. This stark contrast to the mere 40,000 Bitcoin withdrawn between late July and early November suggests that scarcity is creating upward pressure on prices as demand continues to outpace supply.
Excitement surrounding Donald Trump’s election victory has also been playing a pivotal role in Bitcoin’s price dynamics. Trump has proposed establishing a strategic Bitcoin reserve, which many analysts believe would legitimize the cryptocurrency and encourage broader adoption among institutional investors and governments. Tim Kravchunovsky noted that if the U.S. creates a Bitcoin reserve, it could trigger a fear-of-missing-out (FOMO) effect among other nations and sovereign wealth funds looking to allocate Bitcoin into their portfolios. With Trump’s inauguration set for January 20, anticipation is building that this political shift could further propel Bitcoin’s value, some forecasts suggesting Bitcoin could reach as high as $120,000.
In addition, the current global economic conditions are also conducive to Bitcoin’s ascent. Historically, cryptocurrencies have thrived during periods of loose monetary policy. Projections indicate a 97% likelihood that the Federal Reserve will cut interest rates at its upcoming meeting on December 18th. Lower interest rates typically encourage investors to seek higher returns in riskier assets like cryptocurrencies. Additionally, central banks in Canada and Switzerland have recently adopted dovish monetary policies while China has implemented substantial economic stimulus aimed at spurring growth.
Bitcoin’s recent climb above $106,000 can be attributed to a combination of supply constraints due to exchange withdrawals, heightened investor sentiment following Trump’s election victory and potential policy changes favoring digital assets, as well as supportive macroeconomic conditions encouraging risk-taking among investors. As we near the end of 2024, all eyes will be on whether these factors can sustain momentum and push Bitcoin even higher in the coming weeks.
