Bitcoin is on its way to cap a big week, gaining about 9.3% over the past five days. The cryptocurrency breached the $98,000 mark for the first time on Thursday. This milestone follows a surge of over 122% in 2024, marking a spectacular year of growth.

Several factors are fueling Bitcoin's record-breaking run. The main factor is the Trump trade. Trump’s crypto-friendly stance to make the U.S. 'the crypto capital' has pushed the currency up by about 45% past month (as of Nov. 21, 2024).

No wonder, Bitcoin ETF iShares Bitcoin Trust ETF (IBIT) is up 45% past month, with AUM hitting over $41 billion in just 11 months of launch. The BlackRock IBIT ETF has seen a 38% increase in assets under management over the past seven days (as of Nov. 19, 2024), making it the fastest-growing ETF in history. BlackRock's IBIT ETF achieved top 1% status among ETFs in record time.

Driving Factors Behind Bitcoin's Momentum

The crypto market as a whole has gained approximately $900 billion since Trump’s Nov. 5 election win. Investors are expecting second Donald Trump presidency to be a "golden age" for cryptocurrencies. Potential initiatives under such a presidency might include: More supportive regulations for the crypto industry in place of a crackdown. The establishment of a national Bitcoin reserve.

Fiscal policies like larger budget deficits and inflationary pressures, which could further enhance Bitcoin’s appeal as a hedge. There is also better access to capital markets, which is bolstering bitcoin demand. More major players are integrating Bitcoin into their portfolios. Strategists are of the view that the case for $200,000 is made for bitcoin.

Bitcoin ETF Options Begin Trading

Options on BlackRock’s popular iShares Bitcoin Trust ETF IBIT began trading on the Nasdaq Tuesday. IBIT traded 73,000 options contracts in the first 60 mins of trading Tuesday, Nasdaq told CNBC, putting the fund in the top 20 of the most active non-index options. Options trading can provide investors a way to benefit from Bitcoin's infamous price volatility, whether prices are rising or falling.

Gensler to Step Down as SEC Chair in January

Crypto enthusiasts celebrated Thursday as SEC Chair Gary Gensler announced his resignation, effective January, paving the way for improved relations between the cryptocurrency industry and Washington regulators. During his tenure, Gary Gensler frequently clashed with major cryptocurrency companies, with the SEC filing lawsuits against industry leaders like Coinbase.

The Fed Rate Cut is a Plus for Cryptocurrency

Increasing bets of interest rate cuts by the Fed in the coming days make cryptocurrency favorable. Plus, President Trump favors low rates. Both factors should boost risk-on trade sentiments and create bullish opportunities in digital currencies.

Does Bitcoin Perform Well Amid Inflation?

Bitcoin is often touted as a hedge against inflation and has a fixed supply. This move contrasts with traditional fiat currencies, which central banks can issue in unlimited quantities. Thus, in times of inflation, the value of fiat currencies tends to fall.

Meanwhile, Bitcoin can preserve wealth amid high inflation due to its limited supply. In any case, Trump’s promised high import tariff imposition is expected to stoke inflation once again globally. Thus, bitcoin should do well in a such an inflationary environment.

Having said this, we would like to note that the crypto space is extremely volatile as the industry still needs lot of regulations and structures.

Looking Ahead

Analysts predict Bitcoin could reach $100,000 before the end of the year and potentially double in value by the close of 2025. However, investors should also note that traders may be missing out on questions about Trump’s timeline for implementing his crypto-friendly agenda.

Still, we must say that bitcoin has wind beneath its wings. Wall Street behemoth Goldman Sachs has caught attention of the financial community with its renewed interest in Bitcoin after revealing an astounding $710 million in BTC holdings across multiple exchange-traded funds (ETFs).

Investors can keep track of crypto-based exchange-traded funds (ETFs) like Grayscale Bitcoin Trust (GBTC), iShares Bitcoin Trust (IBIT), Fidelity Wise Origin Bitcoin Fund (FBTC), ARK 21Shares Bitcoin ETF (ARKB) and Bitwise Bitcoin ETF (BITB). The ETF GBTC charges 150 bps, IBIT charges 25 bps, FBTC charges 25 bps, ARKB charges 21 bps and BITB charges 20 bps in fees.

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