Bitcoin Nears $100,000 Milestone: What’s Driving the Rally?

The world’s largest cryptocurrency, Bitcoin, is on the brink of a historic milestone, trading just shy of $100,000. Currently sitting around $98,000 after a 2.9% rise, Bitcoin’s recent rally has captivated the financial world, breaking all-time highs for four consecutive days. Here’s a breakdown of the key factors behind this explosive growth.

Political Shifts: The Trump Factor

Bitcoin’s recent surge coincides with Donald Trump’s U.S. election win. Market sentiment often responds strongly to political changes, and Trump’s anticipated economic policies, including deregulation and market stimulation, may be fueling optimism. Historically, Bitcoin has performed well during periods of uncertainty, as it is often seen as a hedge against inflation and economic instability.

Political transitions also tend to inject volatility into traditional markets, making alternative assets like Bitcoin more attractive to investors seeking diversification.

Whale and Shark Activity

Behind the scenes, large-scale Bitcoin holders—often referred to as “whales” and “sharks”—have been quietly accumulating. Over the past month, wallets holding at least 10 BTC have added a staggering 56,397 BTC to their holdings, equivalent to $5.4 billion. While the number of these wallets has decreased slightly, the total Bitcoin they hold has increased significantly. This suggests consolidation among large investors who are betting on Bitcoin’s continued upward trajectory.

Institutional Demand on Coinbase

Another significant factor driving Bitcoin’s price is a surge in demand on Coinbase, one of the largest cryptocurrency exchanges in the world. The Coinbase premium has turned positive, signaling that institutional investors are actively buying. This metric, which measures the price difference between Coinbase and other exchanges, is often used as an indicator of strong buying pressure from U.S.-based investors.

Altcoin Season on the Horizon?

As Bitcoin marches toward $100,000, analysts are speculating about the arrival of an “altcoin season.” If Bitcoin’s dominance in the crypto market begins to wane, altcoins like Ethereum could see a significant rally. Ethereum, in particular, is expected to hit $7,000–$8,000 if market conditions align. Historically, altcoins have performed well after Bitcoin reaches a major peak, as investors diversify into smaller projects.

The Scarcity Effect

One of Bitcoin’s defining features is its capped supply of 21 million coins. With approximately 18.7 million already mined, only 2.3 million are left to enter circulation. This built-in scarcity, combined with growing demand, has consistently driven Bitcoin’s value higher over time.

Fun fact: Bitcoin first reached $1 in February 2011. Now, just over a decade later, it’s closing in on $100,000—a testament to its growth as a mainstream financial asset.

The Path to $100,000

The question now is not if Bitcoin will hit $100,000 but when. Analysts are divided on whether the milestone will be reached today or if it will take a bit longer. Either way, the sentiment is overwhelmingly bullish, with predictions of even higher targets in the near future.

For now, all eyes are on Bitcoin as it approaches this historic mark, with the crypto world abuzz with anticipation.

This article is based on insights from George Glover and other market analysts.