Bitcoin’s $100K tease: What’s next for the crypto world?

The world’s leading cryptocurrency, Bitcoin (BTC-USD), surged above $98,000 in the past 24 hours, inching closer to the $100,000 milestone but stopping just short. November 2024 was historic for the crypto market, especially for Bitcoin, which achieved a record-breaking monthly candle with a $26,400 gain, closing at $96,400.

Currently trading at $97,285.81, Bitcoin is down 0.97% in the last 24 hours. Its strong resistance around $93,000 has been bolstered by developments at MicroStrategy, which spent $5.4 billion acquiring 55,000 Bitcoins last week.

What are the factors driving Bitcoin's march toward $100,000? What’s the outlook amid US crypto regulatory clarity? What are the risks of a 'blow-off top' scenario? How might Trump's proposal for a Bitcoin Reserve impact the market? Fortune India spoke to industry stakeholders in India to explore these questions.

Factors behind BTC bullrun

The Bitcoin rally gained momentum after US President Donald Trump was elected to power. Record inflows in Bitcoin ETFs also added to the surge. "A fantastic run for the Bitcoin ETFs buoyed inflows… Blackrock's Bitcoin ETF surpassed the Blackrock Gold ETF," says Manhar Garegrat, country head, Liminal Custody.

Bitcoin ETFs have seen inflows of over $33 billion since inception, with $2.2 billion in the past week. “President Trump’s election victory and his clear support for Bitcoin and crypto have signalled a positive regulatory stance for this asset,” says Garegrat.

Continued innovation in the blockchain space and investor optimism also contributed to the rally. “The crypto market performance underlines a potent recovery driven by innovation, investor optimism, and pivotal developments in blockchain ecosystems, setting a vibrant stage for 2025," says Avinash Shekhar, co-founder & CEO, Pi42, a crypto-INR perpetual futures exchange.

The market benefitted from the Federal Reserve’s recent interest rate cuts, lowering borrowing costs and increasing liquidity. "These results energised the market, sparking hope that favorable policies could further support digital assets, potentially boosting Bitcoin's adoption and sustained growth," says Sumit Gupta, co-founder, CoinDCX. Gupta also highlights other factors, including Trump’s company eying the acquisition of the crypto trading platform Bakkt. “The introduction of options trading for BlackRock’s iShares Bitcoin Trust (IBIT) marks a pivotal moment for Bitcoin, enhancing liquidity and providing more avenues for institutional investors to engage with the asset."

Balaji Srihari, business head, CoinSwitch, says the crypto market seems to have turned a corner. After a "sideways summer", the world now is witnessing a decisive shift into bullish territory. "The next big milestone on the horizon is $100,000 per Bitcoin."

Ashish Khandelwal, founder of ANQ Finance, says institutional adoption by giants like BlackRock, increasing regulatory clarity, and sustained retail investor demand pushed for increased crypto adoption. "A $100,000 Bitcoin could disrupt traditional finance, reshape the global economic landscape, and accelerate blockchain innovation.”

Risks of a 'blow-off top' scenario

Some stakeholders believe the likelihood of a "blow-off top" scenario is limited, though certain factors could influence it. Garegrat of Liminal says markets can be irrational, but this possibility is low due to Bitcoin's growth potential. "While there may be corrections from sell-offs in certain segments, the fact that large institutions and countries are contemplating strategic Bitcoin reserves makes this scenario unlikely," says Garegrat.

Bitcoin options remain "shallow" in developed markets and will take time to develop. Gupta of CoinDCX highlights the current level of "extreme greed" indicated by the Crypto Fear and Greed Index, urging investors to understand their risk appetite.

A potential short-term price fall could occur if Trump fails to deliver on his promises, says Agrawal of LogX. "If the market feels there's no progress on the regulatory front and starts losing patience, people will begin selling off," says Agrawal.

Another risk stems from ETF flows driven by US retail users. "If retail users believe this is the top and nothing more will happen, we could see outflows from ETFs," adds Agrawal.

Srihari of CoinSwitch thinks traders should be "wary" of excessive leverage, as rapid upward momentum often precedes periods of heightened volatility and potential corrections. "While a sudden “blow-off top” seems unlikely, evolving geopolitical dynamics could cause significant market shifts. Investors should remain vigilant and stay informed about developments that could influence price stability."

Can policy changes drive the Bitcoin rally?

President Donald Trump has indicated support for the crypto industry and pledged to create a ‘Bitcoin Strategic Reserve’ for the US.

"While the $100,000 BTC price is a psychological number, one of the most powerful governments working to recognise crypto’s potential and develop objective regulations is a huge boost to the industry," says Garegrat of Liminal.

Agrawal notes it remains to be seen how American regulations evolve. "If Trump creates pro-crypto policies, the entire world may follow. The US needs to adopt such policies as they will influence decisions by other governments."

Trump’s Bitcoin Reserve idea and its impact

Once a crypto sceptic, U.S. president-elect Donald Trump has embraced the crypto-verse. Following the U.S. presidential elections, Trump injected fresh hope into the crypto community by proposing a sovereign "Bitcoin Reserve," akin to gold or oil.

Hailed as a ‘master stroke’ by crypto advocates, the idea has divided policymakers and economists, with some fearing it could undermine dollar dominance. "If crypto is going to define the future, I want it to be mined, minted, and made in the U.S.A.," Trump said, proposing to reserve all bitcoins currently held by the U.S. government. Predicting Bitcoin could surpass gold's $16 trillion market cap, he suggested using it to pay off the U.S.’ $35-trillion debt.

If the "Bitcoin Reserve" becomes a reality, it could create "uncertainty," says Garegrat of Liminal. "Other G20 giants are also formulating crypto regulations, while smaller nations like Bhutan and El Salvador already hold Bitcoin as strategic reserves."

Sumit Gupta of CoinDCX highlights the potential to counter the U.S. dollar’s declining dominance and discussions around BRICS creating their own currency. "If the U.S. plays its stablecoin card well alongside a Bitcoin Reserve, it could reinforce its supremacy in global trade."

Balaji from CoinSwitch calls it a "potential game-changer" for the crypto community. "If implemented, this move could legitimise Bitcoin as a government-backed asset, significantly altering the market's trajectory."