Bitcoin’s Volatile Journey: Will It Climb Above $100,000?

Between November 4 and November 22, Bitcoin (CRYPTO: BTC) skyrocketed from $67,000 to over $99,000, driven by a wave of enthusiasm among investors. Many believed that crossing the $100,000 threshold was imminent. However, recent days have seen a retreat, with Bitcoin’s price stabilizing around $93,000.

Does this signal the end of Bitcoin’s upward momentum? While some argue that the price surged too quickly, I believe there is still significant potential for growth heading into 2025. Here’s why.

The Importance of Market Sentiment

Understanding Bitcoin requires more than financial knowledge; a grasp of psychology is crucial. Market sentiment plays a key role in how Bitcoin is perceived by investors. The crypto Fear and Greed Index is a handy tool to gauge this sentiment, revealing that even seasoned investors can quickly shift from fear to greed.

Currently, the focus is on the critical $100,000 price point. Many expected some profit-taking once Bitcoin reached that level, and it seems some investors acted a bit early. After all, Bitcoin’s price had taken a remarkable leap post-election, increasing by over 40%, making a correction likely.

The $100,000 benchmark also has broader implications. Reaching this price would elevate Bitcoin to a $2 trillion market cap, placing it alongside a select group of publicly traded companies that have achieved this valuation. Recently, Bitcoin overtook Meta Platforms in market cap and is on track to challenge Alphabet.

Image source: Getty Images.

These factors have led some investors to pause and reassess Bitcoin’s value. Questions arise about whether Bitcoin truly merits a higher valuation than top tech companies.

Three Catalysts for Future Growth

Looking ahead to 2025, several catalysts could propel Bitcoin’s price higher. First is the inflow of new money into spot Bitcoin ETFs, which has been impressive. The iShares Bitcoin Trust (NASDAQ: IBIT) recently crossed the $40 billion mark in assets under management, surpassing the fundraising of the iShares Gold Trust over nearly two decades.

Another potential driver for Bitcoin’s rise is the pro-crypto agenda from incoming president Donald Trump. A key promise involved removing SEC chairman Gary Gensler, which is already underway as Gensler plans to step down in January.

Then there’s the prospect of new legislative measures supporting crypto, including a proposed strategic Bitcoin reserve that would see the U.S. government acquire 1 million Bitcoins over five years. This development would create powerful buying momentum for Bitcoin.

Investing Directly in Bitcoin

No, the post-election rally for Bitcoin isn’t finished. It’s quite possible Bitcoin will reach that crucial $100,000 mark by the year’s end. If that happens, it could be the launchpad for even greater gains. The next significant date to mark is January 20, Inauguration Day, when Trump’s pro-crypto initiatives may take shape.

For those looking to invest in Bitcoin, billionaire Mike Novogratz, CEO of Galaxy Digital, recommends “straight Bitcoin.” Purchasing Bitcoin directly on a cryptocurrency exchange or through a spot Bitcoin ETF is preferable over investing in Bitcoin proxy companies like MicroStrategy, Coinbase Global, or Bitcoin mining firms.

As the end of the year approaches, I anticipate Bitcoin may experience another surge. However, keep in mind that Bitcoin’s price seldom climbs smoothly. Given its history of volatility, surpassing the $100,000 hurdle is likely to be turbulent. Investors should prepare for this journey.

Your Chance at a New Investing Opportunity

Do you ever feel you missed out on investing in top stocks? If so, you might want to take notice of this information.

Sometimes, our team of analysts identifies a “Double Down” stock which they believe is poised for significant growth. If you are concerned about having missed the boat on investments, now could be the prime opportunity before it’s too late. The returns are compelling:

• Nvidia: If you invested $1,000 when we doubled down in 2009, you’d have $355,011!*
• Apple: If you invested $1,000 when we doubled down in 2008, you’d have $44,516!*
• Netflix: If you invested $1,000 when we doubled down in 2004, you’d have $470,586!*

Currently, we are issuing “Double Down” alerts for three exceptional companies, and opportunities like this may not come again soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 25, 2024

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Alphabet, Bitcoin, Coinbase Global, and Meta Platforms. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.